Question 1

Exhibit 4-2 Supply and demand curves Beginning from an equilibrium at point E₁ in Exhibit 4-2, an increase in demand for good X, other things being equal, would move the equilibrium point to:

Accepted Answer

The answer of Exhibit 4-2 Supply and demand curves 
Beginning...

Question 2

Ceteris paribus , if consumer tastes change so that more people are eating broccoli, then what will happen to the market equilibrium for cabbage, a substitute good for broccoli?

Accepted Answer

When consumer tastes shift towards broccoli, demand for its substitute, cabbage, decreases. This leads to a lower equilibrium price and quantity for cabbage as consumers prefer broccoli over cabbage.

Question 3

Exhibit 4-6 Demand and supply curves 
If the market demand and supply curves shift as given in Exhibit 4-6, the resulting new equilibrium will show a(n):

Accepted Answer

The shift in demand and supply curves results in a decrease in market price and an increase in quantity exchanged, which is represented by the intersection of the new demand and supply curves at a lower price and a higher quantity. Therefore, option D is correct.

Question 4

Consider the market for chicken. Assuming that chicken and beef are substitutes, an increase in the price of beef will:

Accepted Answer

An increase in the price of beef (a substitute for chicken) will lead consumers to switch to chicken, causing demand for chicken to increase. This will lead to a higher price and a greater amount of chicken purchased in the market. While the price of beef may cause chicken farmers to increase supply in response to higher demand, the effect on demand will outweigh this and result in a higher price for chicken.

Question 5

Exhibit 4-6 Demand and supply curves 
If the market supply increases and, simultaneously, market demand decreases, the new equilibrium will show:

Accepted Answer

When supply increases and demand decreases simultaneously, the market price will decrease. However, the effect on the quantity exchanged is uncertain and could increase, decrease, or remain the same depending on the magnitude of the changes in supply and demand. Therefore, choice A is the correct answer.

Question 6

Exhibit 4-3 Supply and demand curves The market shown in Exhibit 4-3 is initially in equilibrium at E₄. Changes in market conditions result in a new equilibrium at E₃. This change is stated as a(n):

Accepted Answer

The answer of Exhibit 4-3 Supply and demand curves 
The...

Question 7

Exhibit 4-3 Supply and demand curves 
In Exhibit 4-3, an increase in quantity supplied would cause a movement from which equilibrium point to another, other things being equal?

Accepted Answer

An increase in quantity supplied would shift the supply curve to the right, causing a movement from E₁ to E₄, where the new equilibrium point is reached.

Question 8

Exhibit 4-3 Supply and demand curves 
In Exhibit 4-3, an increase in demand would cause a movement from which equilibrium point to another, other things being equal?

Accepted Answer

The answer of Exhibit 4-3 Supply and demand curves 
In...

Question 9

Exhibit 4-3 Supply and demand curves Initially the market shown in Exhibit 4-3 is in equilibrium at P₂, Q₂ (E₂). Changes in market conditions result in a new equilibrium at P₂, Q₄ (E₄). This change is stated as a(n):

Accepted Answer

The answer of Exhibit 4-3 Supply and demand curves 
Initially...

Question 10

Which of the following would raise both the equilibrium price and the equilibrium quantity of strawberries?

Accepted Answer

An increase in the demand for strawberries would lead to both an increase in the equilibrium price and equilibrium quantity. When demand increases, the demand curve shifts rightward leading to a higher equilibrium price and quantity. A decrease in demand, as in choice A, would lead to a decrease in both the equilibrium price and quantity. Changes in the supply of strawberries, as in choices C and D, would affect only the equilibrium price or quantity but not both.

Question 11

Exhibit 4-6 Demand and supply curves 
If market supply decreases and, simultaneously, market demand increases, the new equilibrium will show:

Accepted Answer

When market supply decreases and market demand increases, we can conclude that the market price will increase. However, the effect on quantity exchanged is uncertain as it depends on the magnitude of the changes in supply and demand. The quantity could increase, decrease, or remain the same depending on the degree of the changes. Therefore, the correct answer is C.

Question 12

Exhibit 4-3 Supply and demand curves Beginning from an equilibrium at point E₂ in Exhibit 4-3, an increase in demand for good X, other things being equal, would move the equilibrium point to:

Accepted Answer

An increase in demand would shift the demand curve to the right, causing an increase in both equilibrium price and quantity. The new equilibrium point would be where the new demand curve intersects with the original supply curve, which is at E₃.

Question 13

An increase in the wages paid to fishermen will have what effect on the fish market equilibrium?

Accepted Answer

An increase in wages paid to fishermen will lead to an increase in the cost of producing fish. This will lead to a decrease in the supply of fish, shifting the supply curve to the left. As a result, the equilibrium price will increase, and the quantity of fish traded in the market will decrease. Therefore, the correct option is D.

Question 14

Suppose prices for new homes have risen, yet sales of new homes have also risen. We can conclude that:

Accepted Answer

The fact that sales of new homes have also risen despite the increase in price suggests that the demand for new homes has also increased. Therefore, the correct choice is A. The other choices do not necessarily follow from the given information.

Question 15

Suppose the market for "soda X" is in equilibrium. If the FDA announced today that this soda has been proven to cause a fatal disease, what would be most likely to happen to the equilibrium price and equilibrium quantity of soda X?

Accepted Answer

The announcement by the FDA that soda X causes a fatal disease would lead to a decrease in demand for the product due to health concerns. As a result, the equilibrium price and quantity would both decrease, leading to a shift along the demand curve to a new equilibrium point with lower price and quantity. Therefore, the most likely outcome is that the equilibrium price and quantity of soda X will decrease, which is option D.

Question 16

Exhibit 4-7 Demand and supply schedules for movie tickets $$\begin{array} { | c | c | c | } 
\hline \text { Price } & \begin{array} { c } 
\text { Quantity } \
\text { Demanded }
\end{array} & \begin{array} { c } 
\text { Quantity } \
\text { Supplied }
\end{array} \
\hline \$ 10 & 200 & 500 \
8 & 240 & 470 \
6 & 370 & 420 \
4 & 390 & 390 \
2 & 410 & 310 \
\hline
\end{array}$$ In Exhibit 4-7, a 100 unit decrease in quantity demanded at every price level would cause the new equilibrium price to become:

Accepted Answer

The answer of Exhibit 4-7 Demand and supply schedules for...

Question 17

Exhibit 4-6 Demand and supply curves In Exhibit 4-6, the demand curve has shifted from D₁ to D₂ and, simultaneously, the supply curve has shifted from S₁ to S₂. Describe these actions in this market.

Accepted Answer

The demand curve has shifted to the right (from D₁ to D₂), indicating an increase in demand for the product, while the supply curve has shifted to the right (from S₁ to S₂), indicating an increase in supply. Therefore, market supply and market demand have both increased.

Question 18

Exhibit 4-5 Supply and demand curves for computers 
Which of the following changes could cause the computer market to change as shown in Exhibit 4-5?

Accepted Answer

Lower costs for computer chips and motherboards would shift the supply curve to the right, leading to an increase in quantity supplied and a decrease in price. This would result in a new equilibrium point at a lower price and a higher quantity of computers sold, as shown in Exhibit 4-5. The failure of several computer manufacturers (B) would likely shift the supply curve to the left, leading to a decrease in quantity supplied and an increase in price, which is the opposite of what is shown in the exhibit. Higher prices for computer software (C) would likely reduce demand, shifting the demand curve to the left and resulting in a new equilibrium point at a lower quantity and higher price. More features and greater ease of use (D) could increase demand and shift the demand curve to the right, potentially leading to a higher price and quantity sold, but this is not reflected in the exhibit.

Question 19

Exhibit 4-3 Supply and demand curves In Exhibit 4-3, which of the following might cause a shift from S₂ to S₁?

Accepted Answer

The answer of Exhibit 4-3 Supply and demand curves 
In...

Question 20

Exhibit 4-3 Supply and demand curves Initially the market shown in Exhibit 4-3 is in equilibrium at P₃, Q₃ (E₃). Changes in market conditions result in a new equilibrium at P₂, Q₂ (E₂). This change is stated as a:

Accepted Answer

The answer of Exhibit 4-3 Supply and demand curves 
Initially...

Quiz 4: Markets in Action

Exhibit 4-2 Supply and demand curves Beginning from an equilibrium at point E₁ in Exhibit 4-2, an increase in demand for good X, other things being equal, would move the equilibrium point to:

Ceteris paribus , if consumer tastes change so that more people are eating broccoli, then what will happen to the market equilibrium for cabbage, a substitute good for broccoli?

Exhibit 4-6 Demand and supply curves If the market demand and supply curves shift as given in Exhibit 4-6, the resulting new equilibrium will show a(n) :

Consider the market for chicken. Assuming that chicken and beef are substitutes, an increase in the price of beef will:

Exhibit 4-6 Demand and supply curves If the market supply increases and, simultaneously, market demand decreases, the new equilibrium will show:

Exhibit 4-3 Supply and demand curves The market shown in Exhibit 4-3 is initially in equilibrium at E₄. Changes in market conditions result in a new equilibrium at E₃. This change is stated as a(n) :

Exhibit 4-3 Supply and demand curves In Exhibit 4-3, an increase in quantity supplied would cause a movement from which equilibrium point to another, other things being equal?

Exhibit 4-3 Supply and demand curves In Exhibit 4-3, an increase in demand would cause a movement from which equilibrium point to another, other things being equal?

Exhibit 4-3 Supply and demand curves Initially the market shown in Exhibit 4-3 is in equilibrium at P₂, Q₂ (E₂) . Changes in market conditions result in a new equilibrium at P₂, Q₄ (E₄) . This change is stated as a(n) :

Which of the following would raise both the equilibrium price and the equilibrium quantity of strawberries?

Exhibit 4-6 Demand and supply curves If market supply decreases and, simultaneously, market demand increases, the new equilibrium will show:

Exhibit 4-3 Supply and demand curves Beginning from an equilibrium at point E₂ in Exhibit 4-3, an increase in demand for good X, other things being equal, would move the equilibrium point to:

An increase in the wages paid to fishermen will have what effect on the fish market equilibrium?

Suppose prices for new homes have risen, yet sales of new homes have also risen. We can conclude that:

Suppose the market for "soda X" is in equilibrium. If the FDA announced today that this soda has been proven to cause a fatal disease, what would be most likely to happen to the equilibrium price and equilibrium quantity of soda X?

Exhibit 4-6 Demand and supply curves In Exhibit 4-6, the demand curve has shifted from D₁ to D₂ and, simultaneously, the supply curve has shifted from S₁ to S₂. Describe these actions in this market.

Exhibit 4-5 Supply and demand curves for computers Which of the following changes could cause the computer market to change as shown in Exhibit 4-5?

Exhibit 4-3 Supply and demand curves In Exhibit 4-3, which of the following might cause a shift from S₂ to S₁?

Exhibit 4-3 Supply and demand curves Initially the market shown in Exhibit 4-3 is in equilibrium at P₃, Q₃ (E₃) . Changes in market conditions result in a new equilibrium at P₂, Q₂ (E₂) . This change is stated as a:

Quiz 4: Markets in Action

Exhibit 4-2 Supply and demand curves Beginning from an equilibrium at point E1 in Exhibit 4-2, an increase in demand for good X, other things being equal, would move the equilibrium point to:

Ceteris paribus , if consumer tastes change so that more people are eating broccoli, then what will happen to the market equilibrium for cabbage, a substitute good for broccoli?

Exhibit 4-6 Demand and supply curves If the market demand and supply curves shift as given in Exhibit 4-6, the resulting new equilibrium will show a(n) :

Consider the market for chicken. Assuming that chicken and beef are substitutes, an increase in the price of beef will:

Exhibit 4-6 Demand and supply curves If the market supply increases and, simultaneously, market demand decreases, the new equilibrium will show:

Exhibit 4-3 Supply and demand curves The market shown in Exhibit 4-3 is initially in equilibrium at E4. Changes in market conditions result in a new equilibrium at E3. This change is stated as a(n) :

Exhibit 4-3 Supply and demand curves In Exhibit 4-3, an increase in quantity supplied would cause a movement from which equilibrium point to another, other things being equal?

Exhibit 4-3 Supply and demand curves In Exhibit 4-3, an increase in demand would cause a movement from which equilibrium point to another, other things being equal?

Exhibit 4-3 Supply and demand curves Initially the market shown in Exhibit 4-3 is in equilibrium at P2, Q2 (E2) . Changes in market conditions result in a new equilibrium at P2, Q4 (E4) . This change is stated as a(n) :

Which of the following would raise both the equilibrium price and the equilibrium quantity of strawberries?

Exhibit 4-6 Demand and supply curves If market supply decreases and, simultaneously, market demand increases, the new equilibrium will show:

Exhibit 4-3 Supply and demand curves Beginning from an equilibrium at point E2 in Exhibit 4-3, an increase in demand for good X, other things being equal, would move the equilibrium point to:

An increase in the wages paid to fishermen will have what effect on the fish market equilibrium?

Suppose prices for new homes have risen, yet sales of new homes have also risen. We can conclude that:

Suppose the market for "soda X" is in equilibrium. If the FDA announced today that this soda has been proven to cause a fatal disease, what would be most likely to happen to the equilibrium price and equilibrium quantity of soda X?

Exhibit 4-6 Demand and supply curves In Exhibit 4-6, the demand curve has shifted from D1 to D2 and, simultaneously, the supply curve has shifted from S1 to S2. Describe these actions in this market.

Exhibit 4-5 Supply and demand curves for computers Which of the following changes could cause the computer market to change as shown in Exhibit 4-5?

Exhibit 4-3 Supply and demand curves In Exhibit 4-3, which of the following might cause a shift from S2 to S1?

Exhibit 4-3 Supply and demand curves Initially the market shown in Exhibit 4-3 is in equilibrium at P3, Q3 (E3) . Changes in market conditions result in a new equilibrium at P2, Q2 (E2) . This change is stated as a:

Exhibit 4-2 Supply and demand curves Beginning from an equilibrium at point E₁ in Exhibit 4-2, an increase in demand for good X, other things being equal, would move the equilibrium point to:

Exhibit 4-3 Supply and demand curves The market shown in Exhibit 4-3 is initially in equilibrium at E₄. Changes in market conditions result in a new equilibrium at E₃. This change is stated as a(n) :

Exhibit 4-3 Supply and demand curves Initially the market shown in Exhibit 4-3 is in equilibrium at P₂, Q₂ (E₂) . Changes in market conditions result in a new equilibrium at P₂, Q₄ (E₄) . This change is stated as a(n) :

Exhibit 4-3 Supply and demand curves Beginning from an equilibrium at point E₂ in Exhibit 4-3, an increase in demand for good X, other things being equal, would move the equilibrium point to:

Exhibit 4-6 Demand and supply curves In Exhibit 4-6, the demand curve has shifted from D₁ to D₂ and, simultaneously, the supply curve has shifted from S₁ to S₂. Describe these actions in this market.

Exhibit 4-3 Supply and demand curves In Exhibit 4-3, which of the following might cause a shift from S₂ to S₁?

Exhibit 4-3 Supply and demand curves Initially the market shown in Exhibit 4-3 is in equilibrium at P₃, Q₃ (E₃) . Changes in market conditions result in a new equilibrium at P₂, Q₂ (E₂) . This change is stated as a: