Question 1

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 (pointB) If there is a decrease in the price of fertiliser 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 fertiliser used on sugar cane will shift the supply curve to the right (to S1U2B0 from S1U1B0), while a decrease in tastes for sugar-sweetened soft drinks will shift the demand curve to the left (to Ds2U1B11 from Ds1U1B11). These two shifts will cause a decrease in equilibrium price and a decrease in equilibrium quantity. As a result, the new equilibrium point will be at point C, where the new supply and demand curves intersect (SS1U2B0 and DS2U1B11).

Question 2

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...

Question 3

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 the demand curve and the supply curve shift to the right, the equilibrium quantity will definitely increase. However, the extent to which the equilibrium price changes depends on the relative magnitude of the shifts. If the supply curve shifts more than the demand curve, then the equilibrium price will decrease, but the equilibrium quantity will increase. Therefore, the best choice is B, which describes a price decrease and a quantity increase.

Question 4

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

An increase in supply and a decrease in demand for the product will lead to a surplus, which will result in firms lowering the price to entice consumers to purchase the excess supply. This will lead to a decrease in the equilibrium price for the product. Option A is incorrect because it describes a shortage, which would result in an increase in the equilibrium price. Option B is incorrect because a decrease in supply would actually increase the equilibrium price, not decrease it. Option D is also incorrect because a decrease in the number of firms producing the product would likely lead to a decrease in supply, which would increase the equilibrium price, not decrease it.

Question 5

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 6

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, which is described in option C. Option A is incorrect because it incorrectly states that the demand for flat-screen televisions increased, but we cannot infer this from the information given. Option B is also incorrect because an increase in supply would not cause a decrease in equilibrium quantity. Option D is incorrect because the lower price would not cause a decrease in supply; it would only cause a movement along the supply curve.

Question 7

Assume that the demand curve for MP3 players shifts to the right and the supply curve for MP3 players shifts 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 8

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. The equilibrium point will move from A to E. A) If the price of oranges, a substitute for apples, decreases and the wages of apple workers increase, how will the equilibrium point change? 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...

Question 9

Assume that the demand curve for MP3 players shifts to the right and the supply curve for MP3 players shifts 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 supply curve shifts more than the demand curve, it leads to a decrease in the equilibrium quantity and an increase in the equilibrium price. Therefore, the best choice is D.

Question 10

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 11

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 12

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. The equilibrium point will move from A to B. A) If there is an increase in the price of fertiliser used on sugar cane and there is a decrease in tastes for sugar-sweetened soft drinks, how will the equilibrium point change? 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

If there is an increase in the price of fertiliser used on sugar cane, the cost of production will increase and supply will decrease, leading to a leftward shift in the supply curve (to S2U1B11S1U1B0). If there is a decrease in tastes for sugar-sweetened soft drinks, the demand for sugar will decrease, leading to a leftward shift in the demand curve (to D2U1B11S1U1B0). These two factors together will result in a decrease in both equilibrium quantity and price, causing the equilibrium point to move from A to E.

Question 13

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 of salmon, assuming demand remains constant.

Question 14

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 used to produce apples would increase the supply of apples, shifting the S₂ curve to the right, resulting in a new equilibrium point at C. A decrease in the price of oranges would decrease the demand for apples, shifting the D₁ curve down. Both of these changes would result in a new equilibrium point at C. The other options do not directly affect either the supply or demand of apples.

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 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 16

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 17

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. The equilibrium point will move from A to B. A) If there is a shortage of apples how will the equilibrium point change? 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 18

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 19

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 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 D₂ and S₂ pointE 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

Point A represents a new equilibrium point where the quantity demanded of apples has decreased and the quantity supplied has increased, resulting in a lower price of apples. In order to reach this new equilibrium point, there needs to be a decrease in the demand or an increase in the supply of apples. Option D states a decrease in the wages of apple workers, which will result in a decrease in the supply of apples, and an increase in the price of oranges, a substitute for apples, which will decrease the demand for apples. Thus, option D is the correct choice. Options A, B, and C do not provide changes that would cause a decrease in demand or an increase in supply of apples.

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

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) ?

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 decrease in the equilibrium price for a product will result

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

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,________.'

Assume that the demand curve for MP3 players shifts to the right and the supply curve for MP3 players shifts to the left,but the supply curve shifts less 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. The equilibrium point will move from A to E.

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

Which of the following statements is true?

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 sugar at the intersection of D₁ and S₁ (point A. The equilibrium point will move from A to B.

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 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 D₁ and S₁ (point A. The equilibrium point will move from A to B.

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,

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 D₂ and S₂ pointE Which of the following changes would cause the equilibrium to change to point A?

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

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) ?

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 decrease in the equilibrium price for a product will result

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

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,________.'

Assume that the demand curve for MP3 players shifts to the right and the supply curve for MP3 players shifts to the left,but the supply curve shifts less 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. The equilibrium point will move from A to E.

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

Which of the following statements is true?

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 sugar at the intersection of D1 and S1 (point A. The equilibrium point will move from A to B.

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 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 D1 and S1 (point A. The equilibrium point will move from A to B.

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,

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 D2 and S2 pointE Which of the following changes would cause the equilibrium to change to point A?

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. The equilibrium point will move from A to E.

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. The equilibrium point will move from A to 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 D₁ and S₁ (point A. The equilibrium point will move from A to 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 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 D₂ and S₂ pointE Which of the following changes would cause the equilibrium to change to point A?