c. Price of Zip's hamburgers will increase, quantity will decrease
d. Price of Zip's hamburger will decrease, quantity will increase
2. Suppose the market for fish (a normal good) in the U.S. is in equilibrium. Then suppose that the
cost of fuel (used in fishing boats) increases, while at the same time average household incomes
in the U.S. increases. According to supply and demand principles, what will happen to the
equilibrium price and quantity in the market for fish?
a. Price and quantity will both increase
b. Price and quantity will both decrease
c. Price will decrease, quantity could increase or decrease
d. Price will increase, quantity could increase or decrease
3. Suppose we are examining the market for bread in Moscow. An unusually good harvest causes
the price of grain to decrease and the supply of bread increases dramatically. The immediate
outcome we expect in the market is:
a. A temporary shortage of bread
b. A temporary surplus of bread
c. The market achieves its new equilibrium
d. A dystopian society develops in which bread is the new currency
4. Consider the situation described in question 3. After the supply shift due to the change in grain
prices, how does the model of supply and demand predict buyers will eventually react?
a. The demand curve will shift to the right
b. The demand curve will shift to the left
c. The demand curve remains the same, but the quantity demanded increases
d. The demand curve remains the same, but the quantity demanded decreases
5. According to the information we examined regarding minimum wages in the U.S., which of the
following statements is true?