1. Elasticity

2. The price of bananas rises and so does the quantity sold. These observations are consistent with: A)An upward shift of the supply curve. B)A downward shift of the supply curve. C)An upward shift of the demand curve. D)A downward shift of the demand curve.

3. With upward sloping supply, if Demand Curve shifts up, Price and Quantity both rise. Quantity Price Old Equilibrium New Equilibrium Demand curve shifts up

4. If the supply curve for bananas shifts upwards and demand curve does not change, we expect that A)Price and quantity both rise. B)Price rises, quantity falls. C)Price and quantity both fall. D)Price falls, quantity rises.

5. Here is the picture. Old equilibrium New equilibrium Quantity Price Supply curve shifts up.

6. How did your clicker do today? A)It accepted both of my answers. B)It accepted one but not both. C)It didn’t accept any except this one.

7. If the demand for bananas is elastic and half the banana crop is destroyed by a hurricane A)The price of bananas rises and total revenue falls. B)The price of bananas rises and total revenue rises. C)Price and quantity both fall.

8. If the demand for bananas is inelastic and the size of the banana crop increases A)Total revenue of banana producers will rise. B)Total revenue of banana producers will fall.