Question

7. If goods A and B are substitutes and the price of good A increases, which of the following are true? Circle all that apply. a. Quantity demanded of B increases B. Consumer surplus derived from good A decreases C. Marginal utility of good A decreases d. Producer surplus of firms producing good B decreases 8. Which of the following will not cause an increase in the demand for peanut butter, a normal good? a. A decrease in the price of jelly b. An increase in consumer income c. Technological change that increases peanut plant yields d. A report claiming that peanut consumption reduces the risk of cavities 9. If an industry has three firms with market shares of 0.5, 0.3, and 0.2, then the Herfindahl index is: a. 1.00 b. 0.56 c. 0.38 d. 0.24 10. Industrial production of automobiles emits a toxic, harmful substance into the atmosphere Given this information, which of the following is true? a. Absent regulation, firms will reduce their pollution to minimize their harmful

          7. If goods A and B are substitutes and the price of good A increases, which of the following are
true? Circle all that apply.
a. Quantity demanded of B increases
B. Consumer surplus derived from good A decreases
C. Marginal utility of good A decreases
d. Producer surplus of firms producing good B decreases
8. Which of the following will not cause an increase in the demand for peanut butter, a normal
good?
a. A decrease in the price of jelly
b. An increase in consumer income
c. Technological change that increases peanut plant yields
d. A report claiming that peanut consumption reduces the risk of cavities
9. If an industry has three firms with market shares of 0.5, 0.3, and 0.2, then the Herfindahl
index is:
a. 1.00
b. 0.56
c. 0.38
d. 0.24
10. Industrial production of automobiles emits a toxic, harmful substance into the atmosphere
Given this information, which of the following is true?
a. Absent regulation, firms will reduce their pollution to minimize their harmful

7. If goods A and B are substitutes and the price of good A increases, which of the following are
true? Circle all that apply.
a. Quantity demanded of B increases
B. Consumer surplus derived from good A decreases
C. Marginal utility of good A decreases
d. Producer surplus of firms producing good B decreases
8. Which of the following will not cause an increase in the demand for peanut butter, a normal
good?
a. A decrease in the price of jelly
b. An increase in consumer income
c. Technological change that increases peanut plant yields
d. A report claiming that peanut consumption reduces the risk of cavities
9. If an industry has three firms with market shares of 0.5, 0.3, and 0.2, then the Herfindahl
index is:
a. 1.00
b. 0.56
c. 0.38
d. 0.24
10. Industrial production of automobiles emits a toxic, harmful substance into the atmosphere
Given this information, which of the following is true?
a. Absent regulation, firms will reduce their pollution to minimize their harmful

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