What happens when demand increases and supply does not change
What will be an ideal response?
demand curve shifts to the right, so equilibrium price and equilibrium quantuty increase
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Which of the following correctly describes the result of a price increase for an inferior good?
A) The substitution effect causes the demand for the good to decrease; the income effect causes the demand for the good to increase. B) Both the substitution effect and the income effect cause the consumer to buy less of the good. C) The substitution effect causes the demand for the good to increase; the income effect causes the demand for the good to decrease. D) The substitution effect causes the consumer to buy less of the good and the income effect causes the consumer to buy more of the good.
If the price of potato chips increases, other things constant, demand for potato-chip dip will
a. not change; only quantity demanded will change b. increase because the goods are substitutes c. decrease because the goods are substitutes d. decrease because the goods are complements e. increase because the goods are complements
A Chow test _____.
A. is used to test the presence of heteroskedasticty in a regression model B. is used to determine how multiple regression differs across two groups C. cannot detect changes in the slope coefficients of dependent variables over time D. cannot be computed for more than two time periods
Which of the following will cause a movement along the supply curve?
A. An increase or decrease in the raw materials costs. B. An increase in labor costs. C. Changes in the cost of the machinery used to make a good. D. Changes in the market price of a good, other things held constant.