Question 1

Figure 3-8
 
-Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D₁ and S₁ (point A) If there is a surplus of motorcycles how will the equilibrium point change?

Accepted Answer

The answer of Figure 3-8
 
-Refer to Figure 3-8.The graph...

Question 2

Figure 3-8
 
-Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for sugar at the intersection of D₁ and S₁ (point A) If there is an increase in the price of fertilizer used on sugar cane and there is a decrease in tastes for sugar-sweetened soft drinks, how will the equilibrium point change?

Accepted Answer

The answer of Figure 3-8
 
-Refer to Figure 3-8.The graph...

Question 3

Figure 3-8
 
-Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D₁ and S₁ (point A) If there is an increase in the wages of apple workers and an increase in the price of oranges, a substitute for apples, the equilibrium could move to which point?

Accepted Answer

The answer of Figure 3-8
 
-Refer to Figure 3-8.The graph...

Question 4

Assume that the demand curve for MP3 players shifts to the right and the supply curve for MP3 players shift to the left,but the supply curve shifts less than the demand curve.As a result

Accepted Answer

The answer of Assume that the demand curve for MP3...

Question 5

Which of the following statements is true?

Accepted Answer

The answer of Which of the following statements is true?
...

Question 6

"The price of compact fluorescent light bulbs fell because of improvements in production technology.As a result,the demand for incandescent light bulbs decreased.This caused the price of incandescent light bulbs to fall; as the price of incandescent light bulbs fell the demand for incandescent light bulbs decreased even further." Evaluate this statement.

Accepted Answer

The statement incorrectly assumes that the decrease in the price of incandescent light bulbs would cause the demand for them to decrease even further. According to the law of demand, a decrease in price would result in an increase in quantity demanded, not a decrease. Therefore, the statement is false.

Question 7

Figure 3-8
 
-Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D₁ and S₁ (point A) If there is a shortage of apples how will the equilibrium point change?

Accepted Answer

The answer of Figure 3-8
 
-Refer to Figure 3-8.The graph...

Question 8

Figure 3-8
 
-Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D₁ and S₁ (point A)If there is an increase in the wages of motorcycle workers and an increase in the price of motorcycle insurance, a complement to motorcycles, the equilibrium could move to which point?

Accepted Answer

An increase in the wages of motorcycle workers and an increase in the price of motorcycle insurance will cause a decrease in the supply of motorcycles. This is because the cost of production has increased due to higher wages, and the cost of owning a motorcycle has increased due to higher insurance premiums. This decrease in supply will shift the supply curve from S₁ to S₂. As a result, the new equilibrium point will be at the intersection of D₁ and S₂, which is point E. Therefore, the correct answer is D.

Question 9

Figure 3-8
 
-Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D₁ and S₂ (point B)If there is an increase in number of companies producing motorcycles and a decrease in income (assume motorcycles are a normal good), the equilibrium could move to which point?

Accepted Answer

An increase in the number of companies producing motorcycles would shift the supply curve to the right, from S₂ to S₃. A decrease in income would shift the demand curve to the left, from D₁ to D₂.

The new equilibrium would be at the intersection of D₂ and S₃, which is point C. Therefore, the answer is C.

Question 10

Figure 3-8
 
-Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D₂ and S₁ (point C) Which of the following changes would cause the equilibrium to change to point B?

Accepted Answer

According to the graph, point B represents a new equilibrium where the demand curve shifts to the right to D₁, and the supply curve shifts to the left to S₂. This can be caused by a decrease in the cost of production (increase in wages of motorcycle workers), which is represented by a leftward shift of the supply curve. Additionally, a decrease in the price of motorcycle insurance which is a complement to motorcycles would result in an increase in the quantity demanded and cause a rightward shift of the demand curve. Therefore, among the given options, only Choice B includes both of these factors that can shift the demand and supply curve in the desired direction to establish a new equilibrium at point B.

Question 11

Figure 3-8
 
-Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D₁ and S₂ (point B) Which of the following changes would cause the equilibrium to change to point C?

Accepted Answer

The answer of Figure 3-8
 
-Refer to Figure 3-8.The graph...

Question 12

Figure 3-8
 
-Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D₁ and S₁ (point A)If the price of oranges, a substitute for apples, decreases and the wages of apple workers increase, how will the equilibrium point change?

Accepted Answer

- A decrease in the price of oranges (a substitute for apples) would decrease the demand for apples (shift D₁ to the left to D₂).
- An increase in the wages of apple workers would increase the cost of production for apple farmers, leading to a decrease in supply (shift S₁ to the left to S₂).
- The new equilibrium point would be at the intersection of D₂ and S₂, which is point E. Therefore, the equilibrium point will move from A to E.

Question 13

Figure 3-8
 
-Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for sugar at the intersection of D₁ and S₂ (point B) If there is an decrease in the price of fertilizer used on sugar cane and there is a decrease in tastes for sugar-sweetened soft drinks, how will the equilibrium point change?

Accepted Answer

A decrease in the price of fertilizer used on sugarcane will shift the supply curve to the right (S₁), while a decrease in tastes for sugar-sweetened soft drinks will shift the demand curve to the left (D₂). The new equilibrium point will be where the new supply and demand curves intersect, which is point C. Therefore, the equilibrium point will move from B to C.

Question 14

Figure 3-8
 
-Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D₁ and S₁ (point A) If the price of motorcycle engines increases, and the wages of motorcycle workers increase, how will the equilibrium point change?

Accepted Answer

The answer of Figure 3-8
 
-Refer to Figure 3-8.The graph...

Question 15

Figure 3-8
 
-Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D₂ and S₁ (point C) Which of the following changes would cause the equilibrium to change to point B?

Accepted Answer

The answer of Figure 3-8
 
-Refer to Figure 3-8.The graph...

Question 16

Assume that the demand curve for MP3 players shifts to the right and the supply curve for MP3 players shift to the left,but the supply curve shifts more than the demand curve.As a result

Accepted Answer

When the demand curve shifts right and the supply curve shifts left, it means that demand for MP3 players has increased while the supply of MP3 players has decreased. However, if the supply curve shifts more than the demand curve, it means that the decrease in supply is greater than the increase in demand. This will result in a shortage of MP3 players, causing the price to increase and the quantity to decrease, leading to a new equilibrium at a higher price and a lower quantity. Therefore, the correct option is D.

Question 17

Which of the following statements is true?

Accepted Answer

The answer of Which of the following statements is true?
...

Question 18

Figure 3-8
 
-Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D₂ and S₂ (point E) Which of the following changes would cause the equilibrium to change to point A?

Accepted Answer

The answer of Figure 3-8
 
-Refer to Figure 3-8.The graph...

Question 19

Figure 3-8
 
-Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D₂ and S₂ (point E) If the technology to produce motorcycles improves and the number of buyers increases, how will the equilibrium point change?

Accepted Answer

The answer of Figure 3-8
 
-Refer to Figure 3-8.The graph...

Question 20

Figure 3-8
 
-Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D₂ and S₁ (point C) If the price of motorcycle side cars (a complement to motorcycles)decreases, and the wages of motorcycle workers increase, how will the equilibrium point change?

Accepted Answer

The answer of Figure 3-8
 
-Refer to Figure 3-8.The graph...

Quiz 3: Where Prices Come From: the Interaction of Demand and Supply

Figure 3-8 -Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D₁ and S₁ (point A) If there is a surplus of motorcycles how will the equilibrium point change?

Assume that the demand curve for MP3 players shifts to the right and the supply curve for MP3 players shift to the left,but the supply curve shifts less than the demand curve.As a result

Which of the following statements is true?

Figure 3-8 -Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D₁ and S₁ (point A) If there is a shortage of apples how will the equilibrium point change?

Figure 3-8 -Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D₂ and S₁ (point C) Which of the following changes would cause the equilibrium to change to point B?

Figure 3-8 -Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D₁ and S₂ (point B) Which of the following changes would cause the equilibrium to change to point C?

Figure 3-8 -Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D₂ and S₁ (point C) Which of the following changes would cause the equilibrium to change to point B?

Assume that the demand curve for MP3 players shifts to the right and the supply curve for MP3 players shift to the left,but the supply curve shifts more than the demand curve.As a result

Which of the following statements is true?

Figure 3-8 -Refer to Figure 3-8.The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D₂ and S₂ (point E) Which of the following changes would cause the equilibrium to change to point A?