Question 1

Which of the following would cause an increase in the equilibrium price and an increase in the equilibrium quantity of watermelons?
A)An increase in demand and an increase in supply
B)An increase in supply
C)An increase in supply and an increase in demand greater than the increase in supply
D)A decrease in demand and an increase in supply

Accepted Answer

An increase in supply would normally cause a decrease in the equilibrium price and an increase in the equilibrium quantity. However, if there is also an increase in demand, the equilibrium price and quantity will both increase. This is because the increase in demand will shift the demand curve to the right, increasing the price and quantity, while the increase in supply will shift the supply curve to the right, decreasing the price but increasing the quantity. If the increase in demand is greater than the increase in supply, the equilibrium price and quantity will both increase.

Question 2

Assume that both the demand curve and the supply curve for MP3 players shift to the right, but the supply curve shifts more than the demand curve.As a result,
A)both the equilibrium price and quantity of MP3 players will decrease.
B)the equilibrium price of MP3 players will decrease; the equilibrium quantity will increase.
C)the equilibrium price of MP3 players may increase or decrease; the equilibrium quantity will decrease.
D)the equilibrium price of MP3 players will increase; the equilibrium quantity will decrease.

Accepted Answer

When both supply and demand curves shift right, the equilibrium quantity must increase, but the change in equilibrium price depends on the relative magnitudes of the two shifts. If the supply curve shifts more than the demand curve, the equilibrium price will decrease, but the equilibrium quantity will increase. This is because the increase in supply will put downward pressure on price, while the increase in demand will put upward pressure on both price and quantity.

Question 3

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? A)The equilibrium point will move from A to B. B)The equilibrium point will move from A to C. C)There will be no change in the equilibrium point. D)The equilibrium point will move from A to E.

Accepted Answer

The answer of Figure 3.8 
-Refer to Figure 3.8.The graph...

Question 4

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 D₁and 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? A)None of the points shown B)B C)C D)E

Accepted Answer

The answer of Figure 3.8 
-Refer to Figure 3.8.The graph...

Question 5

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? A)The equilibrium point will move from A to B. B)The equilibrium point will move from A to C. C)There will be no change in the equilibrium point. D)The equilibrium point will move from A to E.

Accepted Answer

The answer of Figure 3.8 
-Refer to Figure 3.8.The graph...

Question 6

Assume that both the demand curve and the supply curve for MP3 players shift to the right, but the demand curve shifts more than the supply curve.As a result,
A)both the equilibrium price and quantity of MP3 players will increase.
B)the equilibrium price of MP3 players will increase; the equilibrium quantity may increase or decrease.
C)the equilibrium price of MP3 players may increase or decrease; the equilibrium quantity will increase.
D)the equilibrium price of MP3 players will decrease; the equilibrium quantity may increase or decrease.

Accepted Answer

The answer of Assume that both the demand curve and...

Question 7

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,
A)both the equilibrium price and quantity of MP3 players will decrease.
B)the equilibrium price of MP3 players will decrease; the equilibrium quantity will increase.
C)the equilibrium price of MP3 players may increase or decrease; the equilibrium quantity will decrease.
D)the equilibrium price of MP3 players will increase; the equilibrium quantity will decrease.

Accepted Answer

When the demand curve shifts to the right and the supply curve shifts to the left, the equilibrium quantity will increase, but the direction of the price change will depend on the relative magnitudes of the shifts. If the supply curve shifts more than the demand curve, the equilibrium price will increase and the equilibrium quantity will decrease.

Question 8

Which of the following statements is true?
A)An increase in demand causes a change in equilibrium price; the change in price does not cause a further change in demand or supply.
B)A decrease in supply causes equilibrium price to rise; the increase in price then results in a decrease in demand.
C)If both demand and supply increase, there must be an increase in equilibrium price; equilibrium quantity may either increase or decrease.
D)If demand decreases and supply increases, one cannot determine if equilibrium price will increase or decrease without knowing which change is greater.

Accepted Answer

The answer of Which of the following statements is true?
A)An...

Question 9

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,
A)both the equilibrium price and quantity of MP3 players will decrease.
B)both the equilibrium price and quantity of MP3 players will increase.
C)the equilibrium price of MP3 players may increase or decrease; the equilibrium quantity will decrease.
D)the equilibrium price of MP3 players will increase; the equilibrium quantity will decrease.

Accepted Answer

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

Question 10

Which of the following would cause a decrease in the equilibrium price and an increase in the equilibrium quantity of salmon?
A)A decrease in demand and an increase in supply
B)An increase in supply
C)An increase in supply and an increase in demand greater than the increase in supply
D)A decrease in demand and a decrease in supply

Accepted Answer

An increase in supply would cause a leftward shift in the supply curve, decreasing the equilibrium price. At the same time, the increase in supply would result in a rightward shift in the quantity demanded curve, leading to an increase in equilibrium quantity.

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 D₂ and S₁ (point C). Which of the following changes would cause the equilibrium to change to point B? A)A positive change in the technology used to produce apples and a decrease in the price of oranges, a substitute for apples B)An increase in the wages of apple workers and an increase in the price of oranges, a substitute for apples C)An increase in the number of apple producers and a decrease in the number of apple trees as a result of disease D)A decrease in the wages of apple workers and an increase in the price of oranges, a substitute for apples

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 S₂ (point B). Which of the following changes would cause the equilibrium to change to point C? A)A positive change in the technology used to produce apples and a decrease in the price of oranges, a substitute for apples B)An increase in the wages of apple workers and an increase in the price of oranges, a substitute for apples C)An increase in the number of apple producers and a decrease in the number of apple trees as a result of disease D)A decrease in the wages of apple workers and an increase in the price of oranges, a substitute for apples

Accepted Answer

A positive change in technology will shift the supply curve to the right, leading to a new equilibrium point where the supply curve intersects the original demand curve at point C. Additionally, a decrease in the price of oranges, a substitute for apples, will increase the demand for apples, shifting the demand curve to the right and resulting in a new equilibrium at point C.

Question 13

A decrease in the equilibrium quantity for a product will result________.
A)when the quantity demanded for the product exceeds the quantity supplied.
B)when there is a decrease in supply and a decrease in demand for the product.
C)when there is an increase in supply and a decrease in demand for the product.
D)when there is a decrease in demand and a decrease in the number of firms producing the product.

Accepted Answer

A decrease in both supply and demand for a product leads to a decrease in the equilibrium quantity, as both factors contribute to reducing the amount of the product that is bought and sold in the market.

Question 14

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 a 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? A)The equilibrium point will move from B to A. B)The equilibrium point will move from B to C. C)There will be no change in the equilibrium point. D)The equilibrium point will move from B to E.

Accepted Answer

A decrease in the price of fertilizer used on sugar cane will shift the supply curve to the right (SS1U2B12S1U2B0) and a decrease in tastes for sugar-sweetened soft drinks would shift the demand curve to the left (DS1U2B11S1U2B0). The new equilibrium point will be at the intersection of the new supply and demand curves, which is point C. Point B is no longer the equilibrium point.

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 S₂ (point E). Which of the following changes would cause the equilibrium to change to point A? A)A positive change in the technology used to produce apples and a decrease in the price of oranges, a substitute for apples B)An increase in the wages of apple workers and a decrease in the price of oranges, a substitute for apples C)An increase in the number of apple producers and a decrease in the number of apple trees as a result of disease D)A decrease in the wages of apple workers and an increase in the price of oranges, a substitute for apples

Accepted Answer

According to the graph, if the wages of apple workers decrease, then the supply curve will shift to the right (from SS1U1B12S1U1B0 to SS1U1B12S1U1B1) since apple producers will now have less of a cost to produce apples. At the same time, if the price of oranges, a substitute for apples, increases, then the demand curve will shift to the left (from DS1U1B12S1U1B0 to DS1U1B11S1U1B0) since people will switch from buying apples to buying oranges. The new equilibrium point will be at the intersection of the new supply and demand curves, which is point A.

Question 16

Which of the following statements is true?
A)An increase in supply causes a change in equilibrium price; the change in price does not cause a further change in demand or supply.
B)A decrease in supply causes equilibrium price to rise; the increase in price then results in a decrease in demand.
C)If both demand and supply increase, there must be an increase in equilibrium price; equilibrium quantity may either increase or decrease.
D)If demand decreases and supply increases, one cannot determine if equilibrium price will increase or decrease without knowing which change is greater.

Accepted Answer

The answer of Which of the following statements is true?
A)An...

Question 17

Positive technological change in the production of LCD televisions caused the price of LCD televisions to fall.Holding everything else constant, how would this affect the market for Blu-ray players (a complement to LCD televisions)?
A)The supply of Blu-ray players would increase and the equilibrium price of Blu-ray players would decrease.
B)The demand for Blu-ray players would increase and the equilibrium price of Blu-ray players would increase.
C)The demand for Blu-ray players would decrease because consumers could afford to buy fewer LCD televisions and Blu-ray players.
D)The demand for Blu-ray players would increase and the equilibrium price of Blu-ray players would decrease.

Accepted Answer

When the price of LCD televisions falls due to positive technological change, it makes LCD TVs more affordable, increasing their demand. As Blu-ray players are complements to LCD TVs, the demand for Blu-ray players would also increase because more people buying LCD TVs are likely to buy Blu-ray players to use with their new TVs. This increased demand for Blu-ray players would push the equilibrium price of Blu-ray players up, as higher demand with unchanged supply leads to higher prices.

Question 18

A decrease in the equilibrium price for a product will result________.
A)when the quantity demanded for the product exceeds the quantity supplied.
B)when there is a decrease in supply and a decrease in demand for the product.
C)when there is an increase in supply and a decrease in demand for the product.
D)when there is a decrease in demand and a decrease in the number of firms producing the product.

Accepted Answer

A decrease in the equilibrium price for a product will occur when there is an increase in supply and a decrease in demand for the product, resulting in a surplus of the product which leads to a decrease in price.

Question 19

Select the phrase that correctly completes the following statement.'A positive change in technology caused an increase in the supply of flat-screen televisions.As a result, ________.'
A)the price of flat-screen televisions decreased, and the demand for flat-screen televisions increased.
B)the equilibrium quantity of flat-screen televisions decreased.
C)the price of flat-screen televisions decreased, and the quantity demanded of flat-screen televisions increased.
D)the price of flat-screen televisions decreased.The lower price caused the supply of flat-screen televisions to decrease.

Accepted Answer

An increase in supply typically leads to a decrease in price, which is evidenced by the statement "the price of flat-screen televisions decreased." Additionally, an increase in supply should also lead to an increase in quantity demanded, as consumers are more willing and able to purchase the product at a lower price. Therefore, the correct option is C, which states that "the price of flat-screen televisions decreased, and the quantity demanded of flat-screen televisions increased."

Question 20

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? A)The equilibrium point will move from A to E. B)The equilibrium point will move from A to B. C)The equilibrium point will move from A to C. D)The equilibrium will first move from A to B, then return to A.

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

Which of the following would cause an increase in the equilibrium price and an increase in the equilibrium quantity of watermelons?

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

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?

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

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?

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 would cause a decrease in the equilibrium price and an increase in the equilibrium quantity of salmon?

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?

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?

A decrease in the equilibrium quantity for a product will result________.

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?

Which of the following statements is true?

Positive technological change in the production of LCD televisions caused the price of LCD televisions to fall.Holding everything else constant, how would this affect the market for Blu-ray players (a complement to LCD televisions) ?

A decrease in the equilibrium price for a product will result________.

Select the phrase that correctly completes the following statement.'A positive change in technology caused an increase in the supply of flat-screen televisions.As a result, ________.'

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

Which of the following would cause an increase in the equilibrium price and an increase in the equilibrium quantity of watermelons?

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

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?

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

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?

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 would cause a decrease in the equilibrium price and an increase in the equilibrium quantity of salmon?

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?

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?

A decrease in the equilibrium quantity for a product will result________.

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?

Which of the following statements is true?

Positive technological change in the production of LCD televisions caused the price of LCD televisions to fall.Holding everything else constant, how would this affect the market for Blu-ray players (a complement to LCD televisions) ?

A decrease in the equilibrium price for a product will result________.

Select the phrase that correctly completes the following statement.'A positive change in technology caused an increase in the supply of flat-screen televisions.As a result, ________.'

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 apples 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 S₂ (point E) . Which of the following changes would cause the equilibrium to change to point A?