IC #5 Grading Key (2-18-09)
Assume the diagrams below are
for a normal good.
1. An increase in income will cause a movement from:
a. point
A to point B (-2)
b. point
D to point C (-3)
c. D1 to D2 (correct, -0)
d. S1 to S2
(-3)
e. c
and d (-2)
2. A decrease
in the price of a substitute good (for consumers)
will cause a movement from:
a. point A to point B (-2)
b. point D to point C (-3)
c. S1
to S2 (-3)
d. D1
to D2 (-1)
e. D2
to D1 (correct, -0)