Economics Test Essay

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Question 1 (Worth 5 points) (01.06 HC) Graph with one demand and two supply curves. x-axis is labeled Quantity. Y-axis is labeled Price. Demand curve extends from top of y-axis down and right. Supply curve extends from intersection of x- and y-axes up and right, crossing Demand. Dashed line Supply 1 runs parallel to the right of Supply curve, also crossing Demand curve. Q marks the point where Supply and Demand intersect. Q1 marks the point where Supply 1 and Demand intersect. © 2007 Mtfernandes Creative Commons Attribution-Share Alike 3.0 Unported, and Creative Commons Attribution-Share Alike 2.5 Generic license The supply and demand curves reflect the availability and cost of a new gaming system. If the gaming system market is currently at Demand and Supply 1, which change to the graph would have to occur to decrease equilibrium price while raising equilibrium quantity? Add Demand 1 to left of Demand. Add Demand 1 to right of Demand. Add Supply 2 to left of Supply 1. Add Supply 2 to right of Supply 1. Points earned on this question: 0 Question 2 (Worth 5 points) (01.04 MC) Graph shows values along the horizontal axis and vertical axis. Coordinates are plotted to indicate two upward-sloping diagonal lines and two downward-sloping diagonal lines. Line 1 is a downward sloping line with point S at 300, 300 and Point U at 200, 400. Line 2 is a downward sloping line with point T at 500, 300. Line 3 is an upward sloping line with Point S at 300, 300 intersecting line 1 at S and also intersecting line 2. Line 4 is an upward sloping line with point T at 500, 300 intersecting Line 2. Use the above graph to answer the following question. Pretend this graph represents the market for books. Which situation would cause the graph to shift from line 1 to line 2? An increase in the price of books A fire that destroys the

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