1. If the price of the good decreases and the quantity of the good decreases in equilibrium, we can conclude that
a. Demand increased
b. Demand decreased
c. Supply decreased
d. Supply increased
e. None of the above
 

2. Lettuce and Spinach are substitute goods. All else equal, if a spinach beetle destroys half of the nations crop, we can conclude that
a. The price of lettuce will rise and the price of spinach fall
b.The price of lettuce will rise and the price of spinach will rise
c. The price of lettuce will fall and the price of spinach will fall
d. The price of lettuce will fall and the price of spinach will rise
e. None of the above

3. A shortage will exist if
a. Price is above the equilibrium level
b. Price is below the equilibrium level
c. The supply and demand curves do not intersect
d. Both (a) and (c) are correct
e. Both (b) and (c) are correct

4. When the price of peanuts falls
a. The demand for peanuts decreases
b. The demand for peanuts increases
c. The supply of peanuts decreases
d. The supply of peanuts increases
e.The demand for peanuts is not affected.

5. Bananas and apples are substitutes. When the price of bananas falls and a technological advance in apple production occurs at the same time
a. The price of apples rises and the quantity of apples falls
b. The price of apples rises and the quantity of apples rises
c. The price of apples rises and the quantity of apples is ambiguous
d. The price of apples falls and the quantity of apples is ambiguous
e. None of the above is correct