Question 1

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

Accepted Answer

A decrease in the wages of apple workers would reduce production costs, shifting the supply curve to the right. An increase in the price of oranges, a substitute for apples, would increase the demand for apples, shifting the demand curve to the right. Both changes would move the equilibrium to point A.

Question 2

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

The answer of A decrease in the equilibrium quantity for...

Question 3

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 Refer to Figure 3-8. The graph in...

Question 4

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 Refer to Figure 3-8. The graph in...

Question 5

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

Point C represents a new equilibrium where the quantity of apples supplied and demanded has increased. This could be caused by a positive change in technology, which would increase the supply of apples, and a decrease in the price of oranges, a substitute for apples, which would increase demand for apples. Thus, choice A is the correct answer. None of the other options would cause this type of equilibrium shift.

Question 6

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 decrease in the equilibrium price and an increase in the equilibrium quantity, as there would be more salmon available at a lower price. All the other choices involve a decrease in demand, which would cause a decrease in both price and quantity, or an increase in demand that exceeds the increase in supply, which would cause an increase in both price and quantity.

Question 7

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 demand and supply both shift to the right, the equilibrium quantity will always increase. However, if supply shifts more than demand, then the equilibrium price will decrease. This is because the increase in supply will cause a surplus, putting downward pressure on prices. Therefore, the best choice is B - the equilibrium price of MP3 players will decrease and the equilibrium quantity will increase.

Question 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 will shift the supply curve for sugar to the right (SS1U2B12S1U2B0), causing a new equilibrium point at C. A decrease in tastes for sugar-sweetened soft drinks will shift the demand curve for sugar to the left (DS1U1B22S1U1B0), but the effect on the equilibrium point is uncertain. However, the shift in the supply curve will definitely cause the new equilibrium point to move from B to C.

Question 9

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 Refer to Figure 3-8. The graph in...

Question 10

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 11

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 leads to a decrease in price and an increase in quantity demanded according to the law of supply and demand. Therefore, the correct choice is C. Choice A is incorrect because an increase in supply cannot lead to an increase in demand, only a decrease in price. Choice B is incorrect because an increase in supply would lead to an increase, not a decrease, in the equilibrium quantity. Choice D is incorrect because a decrease in price would actually cause an increase in supply, not a decrease.

Question 12

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

The answer of Which of the following would cause an...

Question 13

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)...

Question 14

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

According to the law of demand and supply, an increase in supply and a decrease in demand for the product will lead to a decrease in the equilibrium price. This is because there is an excess supply of the product in the market, causing sellers to lower their prices to attract buyers.

Question 15

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 Refer to Figure 3-8. The graph in...

Question 16

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 17

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 Refer to Figure 3-8. The graph in...

Question 18

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, it increases the equilibrium price and quantity. However, when the supply curve shifts more than the demand curve, it decreases the equilibrium quantity and increases the equilibrium price. Therefore, the equilibrium price of MP3 players will increase while the equilibrium quantity will decrease.

Question 19

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)...

Question 20

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

The answer of Positive technological change in the production of...

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

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

A decrease in the equilibrium quantity for a product will result

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?

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?

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

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,

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,

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, ________.'

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

Which of the following statements is true?

A decrease in the equilibrium price for a product will result

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,

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?

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) ?

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

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

A decrease in the equilibrium quantity for a product will result

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?

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?

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

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,

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,

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, ________.'

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

Which of the following statements is true?

A decrease in the equilibrium price for a product will result

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,

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?

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) ?

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

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?

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?

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?