Question 1

Use the figure below to answer the following questions.
  
Figure 3.5.2
Original equilibrium at 1.
-Refer to Figure 3.5.2, which represents the market for beer.If the price of pizza, a complement of beer rises, what is the new beer equilibrium, ceteris paribus?

Accepted Answer

The answer of Use the figure below to answer the...

Question 2

Use the information below to answer the following questions.
Fact 3.5.1
The market for coffee is initially in equilibrium. Pepsi is a substitute for coffee; cream is a complement of coffee. Consider the market for coffee. Assume that all ceteris paribus assumptions continue to hold except for the event listed.
-Refer to Fact 3.5.1.An increase in the price of Pepsi, a substitute for coffee will

Accepted Answer

When the price of Pepsi, a substitute for coffee, increases, people are likely to switch to coffee, increasing its demand. This higher demand pushes up the price of coffee and encourages producers to supply more, hence increasing the quantity supplied of coffee.

Question 3

Use the information below to answer the following questions.
Fact 3.5.1
The market for coffee is initially in equilibrium. Pepsi is a substitute for coffee; cream is a complement of coffee. Consider the market for coffee. Assume that all ceteris paribus assumptions continue to hold except for the event listed.
-Refer to Fact 3.5.1.The price of cream falls.Simultaneously, there is an increase in the wages of farm workers who harvest coffee beans.The equilibrium quantity of coffee

Accepted Answer

The decrease in the price of cream, a complement of coffee, would increase the demand for coffee, shifting the demand curve to the right. Meanwhile, an increase in the wages of farm workers who harvest coffee beans would increase production costs, leading to a decrease in the supply of coffee, shifting the supply curve to the left. The net effect on the equilibrium quantity of coffee depends on the relative magnitudes of these shifts in supply and demand curves.

Question 4

If Canadians suddenly develop a strong urge to escape the cold winter by taking vacations in Hawaii, the

Accepted Answer

The answer of If Canadians suddenly develop a strong urge...

Question 5

Use the information below to answer the following questions.
Fact 3.5.1
The market for coffee is initially in equilibrium. Pepsi is a substitute for coffee; cream is a complement of coffee. Consider the market for coffee. Assume that all ceteris paribus assumptions continue to hold except for the event listed.
-Refer to Fact 3.5.1.If coffee is a normal good, then a decrease in income will

Accepted Answer

The answer of Use the information below to answer the...

Question 6

Farm land can be used to produce either cattle or corn.If the demand for cattle increases, then the

Accepted Answer

The answer of Farm land can be used to produce...

Question 7

Use the figure below to answer the following questions.
  
Figure 3.5.2
Original equilibrium at 1.
-Refer to Figure 3.5.2, which represents the market for beans.If the price of peas, a substitute for beans and a substitute in production, rises, what is the new beans equilibrium, ceteris paribus?

Accepted Answer

The answer of Use the figure below to answer the...

Question 8

"As domestic car prices have increased, consumers have found foreign cars to be a better bargain.Consequently, domestic car sales have fallen and foreign car sales have risen." Based on this information alone, there has been a

Accepted Answer

The increase in domestic car prices has caused a movement along the demand curve for domestic cars, resulting in a decrease in sales. On the other hand, foreign cars have become a better bargain, causing a shift of the demand curve for foreign cars, resulting in an increase in sales. Therefore, the correct answer is a movement along the demand curve for domestic cars and a shift of the demand curve for foreign cars.

Question 9

When the price of good A rises, the supply curve of good B shifts rightward.Which of the following statements are true?

Accepted Answer

The answer of When the price of good A rises,...

Question 10

Use the information below to answer the following questions.
Fact 3.5.1
The market for coffee is initially in equilibrium. Pepsi is a substitute for coffee; cream is a complement of coffee. Consider the market for coffee. Assume that all ceteris paribus assumptions continue to hold except for the event listed.
-Refer to Fact 3.5.1.A new study comes out, revealing that drinking Pepsi increases your ability to study.The equilibrium quantity of coffee

Accepted Answer

The new study revealing that drinking Pepsi increases ability to study will cause a shift in the demand curve for coffee to the left as some consumers will switch to drinking Pepsi. As a result, the equilibrium quantity of coffee will decrease.

Question 11

Use the figure below to answer the following questions.
  
Figure 3.5.2
Original equilibrium at 1.
-Refer to Figure 3.5.2, which represents the market for tacos.A new scientific study reveals that tacos cause bad breath.Simultaneously, the cost of producing tacos increases.What is the new equilibrium, ceteris paribus?

Accepted Answer

The answer of Use the figure below to answer the...

Question 12

Use the information below to answer the following questions.
Fact 3.5.1
The market for coffee is initially in equilibrium. Pepsi is a substitute for coffee; cream is a complement of coffee. Consider the market for coffee. Assume that all ceteris paribus assumptions continue to hold except for the event listed.
-Refer to Fact 3.5.1.A technological improvement lowers the cost of producing coffee.At the same time, preferences for coffee decrease.The equilibrium quantity of coffee

Accepted Answer

The technological improvement in coffee production (a supply-side change) would tend to increase the quantity of coffee by making it cheaper to produce, shifting the supply curve to the right. However, a decrease in preferences for coffee (a demand-side change) would tend to decrease the quantity of coffee demanded, shifting the demand curve to the left. The overall effect on the equilibrium quantity of coffee depends on the relative magnitudes of these shifts in supply and demand.

Question 13

Use the figure below to answer the following questions.
  
Figure 3.5.2
Original equilibrium at 1.
-Refer to Figure 3.5.2, which represents the market for beans.If the price of peas, a substitute for beans, rises, and the cost of producing beans decreases, what is the new beans equilibrium, ceteris paribus?

Accepted Answer

When the price of peas (a substitute for beans) rises, the demand for beans will increase because consumers will start buying more beans as an alternative to the now more expensive peas. This shifts the demand curve for beans to the right. At the same time, if the cost of producing beans decreases, the supply of beans will increase as it becomes cheaper for producers to produce beans. This shifts the supply curve for beans to the right. The intersection of the new demand and supply curves will be at a point where both the quantity supplied and demanded of beans are higher than before, which corresponds to option C in a typical supply and demand graph setup.

Question 14

Use the figure below to answer the following questions.
  
Figure 3.5.2
Original equilibrium at 1.
-Refer to Figure 3.5.2, which represents the market for tacos.A new scientific study reveals that tacos cause bad breath.Simultaneously, the cost of producing tacos decreases.What is the new equilibrium, ceteris paribus?

Accepted Answer

The new scientific study will likely decrease demand for tacos, which would shift the demand curve to the left. At the same time, the decrease in production costs will increase the supply of tacos, shifting the supply curve to the right. The new equilibrium will be at the intersection of the new supply and demand curves, which is at point 4.

Question 15

Use the figure below to answer the following questions.
  
Figure 3.5.2
Original equilibrium at 1.
-Refer to Figure 3.5.2, which represents the market for beans.If the price of peas, a substitute for beans rises, what is the new beans equilibrium, ceteris paribus?

Accepted Answer

The answer of Use the figure below to answer the...

Question 16

The Genius Software Company has developed an amazing new software package to be used only with Einstein Computers.As a result, the equilibrium price of

Accepted Answer

The Genius Software Company's new software package is specific to Einstein Computers, meaning that it can only be used with those computers. As a result, the demand for Einstein Computers increases, leading to an increase in price and quantity in the market equilibrium. However, there is no direct effect on the prices or quantities of other software packages or computers, so options A, B, and C are incorrect. Option E is also incorrect because the increase in price of Einstein Computers would not lead to a decrease in quantity demanded, as the law of demand states that as price increases, quantity demanded decreases.

Question 17

Use the table below to answer the following questions.
Table 3.5.1
The Market for Car-Seat Heaters
 
-Refer to Table 3.5.1.The equilibrium price is $________ and the equilibrium quantity is ________ heaters per month.

Accepted Answer

The answer of Use the table below to answer the...

Question 18

Use the information below to answer the following questions.
Fact 3.5.1
The market for coffee is initially in equilibrium. Pepsi is a substitute for coffee; cream is a complement of coffee. Consider the market for coffee. Assume that all ceteris paribus assumptions continue to hold except for the event listed.
-Refer to Fact 3.5.1.If there is an increase in the wages of farm workers who harvest coffee beans, the equilibrium quantity of coffee

Accepted Answer

An increase in the wages of farm workers who harvest coffee beans would increase the production cost of coffee, leading to a decrease in the supply of coffee. With demand remaining constant, this would result in a decrease in the equilibrium quantity of coffee.

Question 19

Use the figure below to answer the following questions.
  
Figure 3.5.2
Original equilibrium at 1.
-Refer to Figure 3.5.2, which represents the market for beans.If the price of peas, a substitute for beans in production, rises, what is the new beans equilibrium, ceteris paribus?

Accepted Answer

The answer of Use the figure below to answer the...

Question 20

Use the figure below to answer the following questions.
  
Figure 3.5.2
Original equilibrium at 1.
-Refer to Figure 3.5.2, which represents the market for cow manure.If the price of milk, a complement in production of manure, rises, what is the new manure equilibrium, ceteris paribus?

Accepted Answer

The answer of Use the figure below to answer the...

Quiz 3: Demand and Supply

Use the figure below to answer the following questions. Figure 3.5.2 Original equilibrium at 1. -Refer to Figure 3.5.2, which represents the market for beer.If the price of pizza, a complement of beer rises, what is the new beer equilibrium, ceteris paribus?

If Canadians suddenly develop a strong urge to escape the cold winter by taking vacations in Hawaii, the

Farm land can be used to produce either cattle or corn.If the demand for cattle increases, then the

Use the figure below to answer the following questions. Figure 3.5.2 Original equilibrium at 1. -Refer to Figure 3.5.2, which represents the market for beans.If the price of peas, a substitute for beans and a substitute in production, rises, what is the new beans equilibrium, ceteris paribus?

"As domestic car prices have increased, consumers have found foreign cars to be a better bargain.Consequently, domestic car sales have fallen and foreign car sales have risen." Based on this information alone, there has been a

When the price of good A rises, the supply curve of good B shifts rightward.Which of the following statements are true?

Use the figure below to answer the following questions. Figure 3.5.2 Original equilibrium at 1. -Refer to Figure 3.5.2, which represents the market for beans.If the price of peas, a substitute for beans rises, what is the new beans equilibrium, ceteris paribus?

The Genius Software Company has developed an amazing new software package to be used only with Einstein Computers.As a result, the equilibrium price of

Use the table below to answer the following questions. Table 3.5.1 The Market for Car-Seat Heaters -Refer to Table 3.5.1.The equilibrium price is $ and the equilibrium quantity is heaters per month.

Use the figure below to answer the following questions. Figure 3.5.2 Original equilibrium at 1. -Refer to Figure 3.5.2, which represents the market for beans.If the price of peas, a substitute for beans in production, rises, what is the new beans equilibrium, ceteris paribus?

Use the figure below to answer the following questions. Figure 3.5.2 Original equilibrium at 1. -Refer to Figure 3.5.2, which represents the market for cow manure.If the price of milk, a complement in production of manure, rises, what is the new manure equilibrium, ceteris paribus?

Quiz 3: Demand and Supply

Use the figure below to answer the following questions. Figure 3.5.2 Original equilibrium at 1. -Refer to Figure 3.5.2, which represents the market for beer.If the price of pizza, a complement of beer rises, what is the new beer equilibrium, ceteris paribus?

If Canadians suddenly develop a strong urge to escape the cold winter by taking vacations in Hawaii, the

Farm land can be used to produce either cattle or corn.If the demand for cattle increases, then the

Use the figure below to answer the following questions. Figure 3.5.2 Original equilibrium at 1. -Refer to Figure 3.5.2, which represents the market for beans.If the price of peas, a substitute for beans and a substitute in production, rises, what is the new beans equilibrium, ceteris paribus?

"As domestic car prices have increased, consumers have found foreign cars to be a better bargain.Consequently, domestic car sales have fallen and foreign car sales have risen." Based on this information alone, there has been a

When the price of good A rises, the supply curve of good B shifts rightward.Which of the following statements are true?

Use the figure below to answer the following questions. Figure 3.5.2 Original equilibrium at 1. -Refer to Figure 3.5.2, which represents the market for beans.If the price of peas, a substitute for beans rises, what is the new beans equilibrium, ceteris paribus?

The Genius Software Company has developed an amazing new software package to be used only with Einstein Computers.As a result, the equilibrium price of

Use the table below to answer the following questions. Table 3.5.1 The Market for Car-Seat Heaters -Refer to Table 3.5.1.The equilibrium price is $________ and the equilibrium quantity is ________ heaters per month.

Use the figure below to answer the following questions. Figure 3.5.2 Original equilibrium at 1. -Refer to Figure 3.5.2, which represents the market for beans.If the price of peas, a substitute for beans in production, rises, what is the new beans equilibrium, ceteris paribus?

Use the figure below to answer the following questions. Figure 3.5.2 Original equilibrium at 1. -Refer to Figure 3.5.2, which represents the market for cow manure.If the price of milk, a complement in production of manure, rises, what is the new manure equilibrium, ceteris paribus?

Use the table below to answer the following questions. Table 3.5.1 The Market for Car-Seat Heaters -Refer to Table 3.5.1.The equilibrium price is $ and the equilibrium quantity is heaters per month.