Econ 545 Quiz 1

1. (TCO A)There is a decrease in the cost of laborfor producing bicycles. (4 pts.) What happens to bicycle supply? (6 pts.) What happens to bicycle demand? (Points : 10)A.) The supply curve will shift to the right. The bicycle supplies average cost and marginal cost will increase. The price will most likely decline.B.) The bicycle demand will not change just because the cost increases.

Question 2.2. (TCO A)Ceteris paribus,coffee Brand X and coffee Brand A aresubstitutes in consumption. The price ofcoffeeBrand Xfalls. (4 pts.) a. What happens to the demand for coffee Brand A? (6 pts.) b. What happens to the demand for coffee Brand X? (Points : 10)a.) The demand for coffee Brand A would fall since brand x fell. b.) The demand for coffee...