Z is a normal good. The equilibrium price and quantity of Z in the year 2011 was $25 and 60 units, respectively. In 2014, the equilibrium price of Z had increased to $35 but the equilibrium quantity had decreased to 50 units
Other things remaining the same, which of the following could explain this change? A) Shift of the supply curve of Z to the left
B) Shift of the supply curve of Z to the right
C) Shift of the demand curve for Z to the left
D) Shift of the demand curve for Z to the right
A
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When the price of a product falls for a normal good, the:
A. Income and substitution effects will encourage consumers to purchase more of the product B. Income and substitution effects will encourage consumers to purchase less of the product C. Substitution effect will encourage consumers to purchase less of the product and the income effect will encourage them to purchase more D. Substitution effect will encourage consumers to purchase more of the product and the income effect will encourage them to purchase less
Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as
A. long-run aggregate supply shifting leftward B. Short-run aggregate supply shifting downward C. Aggregate demand shifting rightward D. Aggregate demand shifting leftward