Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 4, Problem 5MCQ
To determine
To select:
The option that shows the effect on
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I think (d) equilibrium quantity of blue jeans decreases is right?
The market for digital watches is at its market equilibrium. Now the cost of producing a digital watch rises, and at the same time, the price is expected to fall next month. What is the effect on the equilibrium price and equilibrium quantity this month?
This month, the equilibrium price of a digital watch ________ and the equilibrium quantity of digital watches ________.
A.
will rise; will decrease
B.
might rise, fall, or not change; will decrease
C.
will rise; might increase, decrease, or not change
D.
will fall; will increase
Assume that the equilibrium price of French fries rises, while the equilibrium quantity falls. The most consistent explanation for this observation is:a. An increase in the price of onion rings (a substitute for French fries).b. A fall in the price of onion rings.c. A rise in the price of potato bread (production-side substitute for French fries)d. A fall in the price of potato bread.Note: the answer is alternative C) and you are asked to argue why it is correct; and further argue why the other alternatives are false or uncertain.
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- The market in questions is the Halloween costume market. Halloween season is approaching. What do you expect to happen to the supply of Halloween Costumes? A). Will the supply change (shift of the curve) of will the quantity supplied change (movement along the line)? Answer:______________________________________ B). If supply changes, will the curve shift to the right (increase in supply) or shift to the left (decrease in supply)? Please draw this on the graph above. C). If the supply changes, what is the factor or determinant affecting the change? If the curve did not shift, there is no determinant. Please see Supply/Demand Cheat Sheet...Hint: Natural Disasters, Price of inputs, technology, and expectations Answer:_____________________________________arrow_forward12:43 H+ X AC40040E Intro to Economics... •*• c. Use the information in the table to calculate how a 5% increase in the price of Pepsi affects the quantity of Coke demanded. d. Use the information in the table to calculate how a 10% decrease in the price of gasoline affects the quantity of SUVS demanded. Q3) Taiwan is a major world supplier of semiconductor chips. A recent earthquake severely damage the production facilities of Taiwanese chip-producing companies, sharply reducing the amount of chi they could produce. a. Assume that the total revenue of a typical non-Taiwanese chip manufacturer rises due to these events. In terms of an elasticity, what must be true for this to happen? Illustrate the change in total revenue with a diagram, indicating the price effect and the quantity effect of the Taiwan earthquake this company's total revenue. b. Now assume that the total revenue of a typical non-Taiwanese chip manufacturer falls due to these events. In terms of an elasticity, what must…arrow_forwardWhen due to rise in price of a good, total expenditure on the good also rises, then demand is _________arrow_forward
- 2arrow_forwardWhat are the correct relations between increasing and decreasing for all shown below?arrow_forwardThe market for fresh chicken is at its market equilibrium. Now the price of beef rises and the number of chicken producers increases. What happens to the equilibrium price and equilibrium quantity of chicken? With all other influences on the market for chicken remaining the same, the equilibrium price of a chicken ________ and the equilibrium quantity of chicken ________. A. might rise, fall, or not change; will decrease B. might rise, fall, or not change; will increase C. rise; might increase, decrease, or not change D. rise; will increasearrow_forward
- If we observe that the equilibrium price of eggs increased from $1.70 to $1.80 from April to May while the equilibrium quantity decreased from 1.5 million to 1 million sold then which of the following could've caused these changes? O It was announced that eggs each day can be good for your heart. O The price of bacon increased and people like to bacon and eggs together. The price of wire fencing to contain chickens decreased. O The price of chicken feed increased.arrow_forwardOnly typed answerarrow_forward4arrow_forward
- A flood decreases the quantity of roses supplied by 90 roses a day at each price. How does the rose market move to its new equilibrium? As the market moves to its new equilibrium, the price ________ and the quantity demanded ________. A. rises; increases B. falls; increases C. falls; decreases D. rises; decreasesarrow_forward“Decreasing the supply of crude oil raises the crude oil price. When the crude oil price goes up, the demand for crude oil decreases. As a result, the equilibrium crude oil price drops and equilibrium quantity of crude oil declines.” What is (are) the mistake(s) in the above argument? Please state the mistake(s) and correct the above argument.arrow_forwardHow would [1] a decrease in the price of flour and [2] an improvement in technology of pizza making would affect the market price and quantity of pizza, other things remaining constant? The price of pizza would drop and the equilibrium quantity would rise. The price of pizza would drop but the impact on the equilibrium quantity is uncertain. The equilibrium quantity of pizza would rise but the impact on price is uncertain. Both the price as well as the equilibrium quantity of pizza would rise.arrow_forward
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