Question 1

If the demand for jelly increases, and the price of grapes used to make jelly)rises

Accepted Answer

If the demand for jelly increases, it creates an upward pressure on the equilibrium price of jelly. However, if the price of grapes used to make jelly rises, it increases the cost of production for jelly manufacturers. As a result, jelly manufacturers might reduce the supply of jelly, which creates a downward pressure on the equilibrium price of jelly. Therefore, the equilibrium price of jelly might rise or fall, and the equilibrium quantity of jelly might also rise or fall depending on the extent of the increase in demand and increase in the price of grapes. However, we can say for certain that the equilibrium price of jelly would not fall and the equilibrium quantity of jelly would not fall because the increase in demand would counteract the effect of the increase in the price of grapes to some extent.

Question 2

If the demand for jelly decreases, and the price of grapes used to make jelly)rises

Accepted Answer

If the demand for jelly decreases, there will be a decrease in the equilibrium quantity of jelly, but the effect on the equilibrium price will depend on the change in the cost of production (in this case, the cost of grapes). If the price of grapes used to make jelly rises, then the cost of production for jelly will increase, which will increase the cost of producing each unit of jelly for the suppliers. This increase in cost of production will lead to a decrease in the supply of jelly, which will further decrease the equilibrium quantity of jelly. The effect on the equilibrium price of jelly, however, is uncertain as it depends on the extent of decrease in demand and increase in cost of production. The equilibrium price might rise or fall depending on the degree of shift in the demand and supply curves.

Question 3

As a result of advances in technology, cellular telephones have become cheaper to produce. Illustrate the effect of this change on the market for cellular telephones.

Accepted Answer

The answer of As a result of advances in technology,...

Question 4

Explain what would happen to the equilibrium price and quantity of oranges if the supply of oranges increased while the demand for oranges decreased.

Accepted Answer

The answer of Explain what would happen to the equilibrium...

Question 5

If supply of a product increases and demand for the product decreases, equilibrium quantity will definitely change.

Accepted Answer

The answer of If supply of a product increases and...

Question 6

Figure 3.5
-Figure 3.5 illustrates a set of supply and demand curves for hamburgers. A decrease in supply and a decrease in demand are represented by a movement from

Accepted Answer

The answer of  Figure 3.5
-Figure 3.5 illustrates a set...

Question 7

Suppose that a new advertising campaign extolling the virtues of apple juice is successful, and a major freeze destroys half of the countryʹs apple crop. What happens to the price and quantity of apple juice?

Accepted Answer

With the successful advertising campaign, the demand for apple juice increases, which causes an increase in equilibrium price and quantity. However, with the freeze destroying half of the country's apple crop, the supply of apple juice decreases, which causes an increase in equilibrium price and a potential decrease in equilibrium quantity. Therefore, both factors are pushing the equilibrium price of apple juice up, while the effect on equilibrium quantity is uncertain.

Question 8

If supply of a product increases and demand for the product decreases, equilibrium price will definitely change.

Accepted Answer

When supply of a product increases and demand for the product decreases, there will be excess supply in the market which will lead to a decrease in equilibrium price. Therefore, the equilibrium price will definitely change.

Question 9

Describe the changes in the variables that will cause supply for a product to decrease, shifting the supply curve up and to the left.

Accepted Answer

The answer of Describe the changes in the variables that...

Question 10

Explain what would happen to the equilibrium price and quantity of iPhones if the supply of iPhones increased while the demand for iPhones also increased.

Accepted Answer

The answer of Explain what would happen to the equilibrium...

Question 11

Using a graph, illustrate the effect that an increase in production costs will have on the equilibrium price and quantity of a good.

Accepted Answer

The answer of Using a graph, illustrate the effect that...

Question 12

Explain the difference between a change in quantity supplied and a change in supply.

Accepted Answer

The answer of Explain the difference between a change in...

Question 13

Bananas and apples are substitutes. When the price of bananas falls, and a technological advance in apple production occurs at the same time

Accepted Answer

When the price of bananas falls, consumers may switch from apples to bananas, reducing the demand for apples and leading to a potential fall in the price of apples. A technological advance in apple production increases the supply of apples, which can also lead to a decrease in the price due to higher availability. The equilibrium quantity of apples might rise due to increased supply from the technological advance, but the effect on quantity from the demand side is uncertain since it depends on the magnitude of the shift in demand relative to the shift in supply.

Question 14

Suppose that a new study is released stating that consumption of orange juice a substitute for apple juice)reduces the risk of cancer, and a major freeze destroys half of the countryʹs apple crop. What happens to the price and quantity of apple juice?

Accepted Answer

The new study suggesting that orange juice reduces the risk of cancer may lead to some consumers switching from apple juice to orange juice. This decrease in demand for apple juice may cause a decrease in the price of apple juice. However, the major freeze destroying half of the country's apple crop will cause a decrease in the supply of apple juice, which may cause an increase in the price of apple juice. The quantity of apple juice is likely to fall due to the decreased supply, but the effect on quantity demanded is uncertain due to the potential substitution effect of the new study. Therefore, the price of apple juice might rise or fall, and the quantity of apple juice falls.

Question 15

Describe the changes in the variables that will cause supply for a product to increase, shifting the supply curve down and to the right.

Accepted Answer

The answer of Describe the changes in the variables that...

Question 16

Explain what would happen to the equilibrium price and quantity of pineapples if the supply of pineapples decreased while the demand for pineapples increased.

Accepted Answer

The answer of Explain what would happen to the equilibrium...

Question 17

A decrease in the cost of production will shift the supply curve down and to the right.

Accepted Answer

When the cost of production decreases, suppliers are able to offer their goods/services at lower prices, therefore increasing the quantity supplied at each price and shifting the supply curve down and to the right.

Question 18

Bananas and apples are substitutes. When the price of bananas rises, and a technological advance in apple production occurs at the same time

Accepted Answer

When the price of bananas rises, consumers will switch to apples, increasing the demand for apples. Simultaneously, a technological advance in apple production increases the supply of apples. The increased demand raises the price, while the increased supply tends to lower the price. The net effect on price is uncertain without more information. However, both effects lead to an increase in the equilibrium quantity of apples.

Question 19

A change in the price of a product will change the supply of that product.

Accepted Answer

A change in the price of a product affects the quantity supplied, not the supply. The supply refers to the entire relationship between price and the quantity available at those prices, while a change in price moves along the supply curve, changing the quantity supplied.

Question 20

An increase in wages will shift the supply curve up and to the left.

Accepted Answer

An increase in wages means that the cost of production has increased, which will make producers less willing to supply goods or services at the same price level. Therefore, the supply curve will shift up and to the left.

Quiz 3: Demand, Supply, and Market Equilibrium

If the demand for jelly increases, and the price of grapes used to make jelly) rises

If the demand for jelly decreases, and the price of grapes used to make jelly) rises

As a result of advances in technology, cellular telephones have become cheaper to produce. Illustrate the effect of this change on the market for cellular telephones.

Explain what would happen to the equilibrium price and quantity of oranges if the supply of oranges increased while the demand for oranges decreased.

If supply of a product increases and demand for the product decreases, equilibrium quantity will definitely change.

Figure 3.5 -Figure 3.5 illustrates a set of supply and demand curves for hamburgers. A decrease in supply and a decrease in demand are represented by a movement from

Suppose that a new advertising campaign extolling the virtues of apple juice is successful, and a major freeze destroys half of the countryʹs apple crop. What happens to the price and quantity of apple juice?

If supply of a product increases and demand for the product decreases, equilibrium price will definitely change.

Describe the changes in the variables that will cause supply for a product to decrease, shifting the supply curve up and to the left.

Explain what would happen to the equilibrium price and quantity of iPhones if the supply of iPhones increased while the demand for iPhones also increased.

Using a graph, illustrate the effect that an increase in production costs will have on the equilibrium price and quantity of a good.

Explain the difference between a change in quantity supplied and a change in supply.

Bananas and apples are substitutes. When the price of bananas falls, and a technological advance in apple production occurs at the same time

Suppose that a new study is released stating that consumption of orange juice a substitute for apple juice) reduces the risk of cancer, and a major freeze destroys half of the countryʹs apple crop. What happens to the price and quantity of apple juice?

Describe the changes in the variables that will cause supply for a product to increase, shifting the supply curve down and to the right.

Explain what would happen to the equilibrium price and quantity of pineapples if the supply of pineapples decreased while the demand for pineapples increased.

A decrease in the cost of production will shift the supply curve down and to the right.

Bananas and apples are substitutes. When the price of bananas rises, and a technological advance in apple production occurs at the same time

A change in the price of a product will change the supply of that product.

An increase in wages will shift the supply curve up and to the left.