Review for the First Test - Principles of Microeconomics | ECN 143, Exams of Microeconomics

ECN 143

In class review for the first test

A. What happens to price and quantity sold when the following events take

place? Assume the product is a normal good and the substitute product is a

competitor’s product (a substitute good on the demand side).

1. Production costs decrease and consumer incomes increase.

2. Production costs increase and population increases.

3. More firms enter the market and the price of a substitute good

increases.