Macro Economics Quiz 3 Guaranteed Success
1. The money prices of both increased, the relative price of the hospital room increased, and the relative
price of the hotel decreased. - ️ True (Relative prices consider price changes relative to one another).
2. The money price of shoes and a t-...
1. The money prices of both increased, the relative price of the hospital room increased, and the relative
price of the hotel decreased.
- ✔️ True (Relative prices consider price changes relative to one another).
2. The money price of shoes and a t-shirt have risen and the relative price of shoes has fallen while the t-
shirt has risen.
- ✔️ The conclusion about the relative price of shoes falling is contradictory, as both prices rising
would typically not reduce the relative price of shoes unless the t-shirt price increased more than the
shoes.
3. Firms providing wireless Internet access services reduce their prices. This will cause a(n)
- ✔️ Decrease in demand is incorrect; it would typically cause a movement along the demand curve
(increase in quantity demanded) unless it affects consumer preferences.
4. Firms providing cable-based Internet access services reduce their prices. This will cause a(n)
- ✔️ Increase in quantity demanded is correct.
, 5. There is a decrease in the incomes earned by consumers
- ✔️ This will indeed lead to a decrease in demand for normal goods.
6. Consumers' tastes shift away from using wireless internet access in favor of cable-based internet
access.
- ✔️ This will cause an increase in demand for cable access and a decrease in demand for wireless.
7. There is an increase in the price of carrying cases for wireless earbuds: Equilibrium quantity would
(decrease). Equilibrium price would (decrease)
- ✔️ Decrease in demand is correct but the price statement needs context. If cases are complements,
an increase in their price could decrease the demand for wireless earbuds, leading to lower equilibrium
quantity and price.
8. There is a decrease in the price of devices used to charge wireless earbuds: Equilibrium quantity
would (increase). Equilibrium price would (increase)
- ✔️ If the charging devices are complementary, a decrease in their price would increase demand
(shifting the demand curve to the right).
9. There is an increase in consumers of wireless earbuds: Equilibrium quantity would (increase).
Equilibrium price would (increase)
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