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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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?
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will rise; will decrease
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might rise, fall, or not change; will decrease
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Which of the following events will increase the supply of sunscreen? If ________ and no other influences on selling plans change, then the supply of sunscreen will increase.
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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_forwardllustrate in the below graph the consequences caused by an oversupply (high increase) on supply and a slight decline (small decrease) of demand -What will happen with the price of oil, will increase or decrease? -What about the total quantity of oil production, will increase or decrease? . please make sure the answer is correct 100%arrow_forwardWhich graph best represents the effects of a winter frost/freeze on the supply of orange crops in Florida? а. b. С. d.arrow_forward
- When due to rise in price of a good, total expenditure on the good also rises, then demand is _________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_forwardIf 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_forward
- b. The equilibrium price of printers saw a large decrease in the past year, howeverthe equilibrium quantity remained unchanged. Three individuals provided anexplanation for the situation. Which explanation(s) could be correct? Explain.• Alex: Demand increased, but supply was totally inelastic.• Lance: Supply increased, but so did demand.• Ricardo: Supply decreased, but demand was totally inelasticarrow_forwardllustrate in the below graph the consequences caused by an oversupply (high increase) on supply and a slight decline (small decrease) of demand -What will happen with the price of oil, will increase or decrease? -What about the total quantity of oil production, will increase or decrease?arrow_forwardThe market is the burger market. Production at a burger chain had been slow, but the owners invested in a new, fast cooking grill and fryer (a new technology). What do you expect to happen to the supply of burgers? 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_forward
- Practice with Determinants: SUPPLY Supply 1-4 1. The following headline appeared in the London Times, "England's sheep population nearly destroyed by famine!" How will this affect the supply of wool around the world? Show the shift in supply and name the determinant. "Name the determinant: 2. In an effort to encourage economic growth, the United States government has cut corporate income taxes by 20%. How will this affect firms' ability to supply their products? Show the shift in supply and name the determinant. "Name the determinant: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_forwardWhat might cause Supply to shift from the Original Supply to the New Supply?. Price of a cup of coffee $3.50 3.00 2.50 2.00 1.50 1.00 $.50 0 10 Original Supply New Demand Original Demand 20 30 40 50 60 70 Cups sold in an hour New Supply A reduction in coffee farmland taxes. OA storm in South America wipes out the entire coffee crop. A news report that coffee consumption greatly increases productivity. An increase in the price of tea.arrow_forward
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The growing economy of the electric car industry; Author: TRT World;https://www.youtube.com/watch?v=Qh2jXn_akmk;License: Standard Youtube License