1. As part of the preparations for the arrival of a hurricane, NC residents sought to buy electricity generators. As a result, you expect that in NC

a. the price of generators will tend to rise
b. the price of generators will tend to fall
c. shortages will tend to be observed
d. a and c
e. b and c.

2. Recent studies have found that many types of medication intended to help with weight loss also have serious health side-effects. As a result of these widely reported studies

a. demand for this medication will shift to the right
b. price will rise and quantity will fall
c. price will rise and quantity will rise
d. price will fall and quantity will rise
e. none of the above.

3. Recent tension in the Middle East has caused the price of oil to rise. What would we
expect to happen to the demand for automobiles?

a. The demand for automobiles will shift out.
b. The demand for automobiles will shift in.
c. The demand for automobiles will stay the same.
d. We cannot tell what will happen.

4. Which of the following will NOT cause a shift in the demand curve for Stella Artois beer?

a. a change in the price of Stella Artois beer
b. a change in income
c. a change in the price of Budweiser beer (a substitute)
d. a change in the price of fried potatoes (a complement)
e. none of the above.

5. Many large cities require that taxi cabs have a "medallion" issued by the city government. The total number of medallions has been held constant, although taxi operators are permitted to buy and sell existing medallions. The city now decides to issue new additional medallions. As a result,

a. taxi fares will decline but the price of medallions will rise
b. taxi fares will rise and the price of medallions will rise
c. taxi fares will decline and the price of medallions will decline
d. taxi fares will rise but the price of medallions will fall

6. Consider a single-object, sealed-bid auction (where the "winner" is the highest bidder). When bidders are uncertain about the values that other bidders have for the object, they should submit

a. a bid exactly equal to their own value
b. a bid higher than their own value
c. a bid lower than their own value
d. a bid that is as high as possible, to guarantee that they win the auction

7. A couple of years ago, European consumers were informed that meat (beef and chicken) produced in Belgium and in several of the countries that supply consumers in the continent with meat, contains dioxin, a substance extremely dangerous for humans. As a result, in Europe

a. price of meat increases and quantity of meat decreases
b. price of meat decreases and quantity of meat increases
c. price of fish increases and quantity of fish decreases
d. price of fish increases and quantity of fish increases

8. The Securities and Exchange Commission (SEC) has been reliably reported to be conducting a large investigation of major potential accounting fraud by GlobalCom Corporation. As a result of this news, you predict that

a. The stock price of GlobalCom will rise immediately
b. The stock price will fall immediately
c. The stock price of GlobalCom will not change until the investigation is concluded
d. The supply of GlobalCom shares (from existing shareholders) will shift in.