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122.
If consumers often purchase muffins to eat while they drink their lattés at local coffee shops,
what would happen to
the equilibrium price and quantity of lattés if the price of muffins falls?
a.
Both the equilibrium price and quantity would increase.
b.
Both the equilibrium price and quantity would decrease.
c.
The equilibrium price would increase, and the equilibrium quantity would decrease.
d.
The equilibrium price would decrease, and the equilibrium quantity would increase.
123.
If consumers view cappuccinos and lattés as substitutes, what would happen to the equilibrium
price and quantity of
lattés if the price of cappuccinos rises?
a.
Both the equilibrium price and quantity would increase.
b.
Both the equilibrium price and quantity would decrease.
c.
The equilibrium price would increase, and the equilibrium quantity would decrease.
d.
The equilibrium price would decrease, and the equilibrium quantity would increase.
124.
If consumers view cappuccinos and lattés as substitutes, what would happen to the equilibrium
price and quantity of
lattés if the price of cappuccinos falls?
a.
Both the equilibrium price and quantity would increase.
b.
Both the equilibrium price and quantity would decrease.
c.
The equilibrium price would increase, and the equilibrium quantity would decrease.
d.
The equilibrium price would decrease, and the equilibrium quantity would increase.
125.
If scientists discover that steamed milk, which is used to make lattés, prevents heart attacks,
what would happen to
the equilibrium price and quantity of lattés?
a.
Both the equilibrium price and quantity would increase.
b.
Both the equilibrium price and quantity would decrease.
c.
The equilibrium price would increase, and the equilibrium quantity would decrease.
d.
The equilibrium price would decrease, and the equilibrium quantity would increase.
126.
What would happen to the equilibrium price and quantity of lattés if the cost of producing
steamed milk, which is
used to make lattés, rises?
a.
Both the equilibrium price and quantity would increase.
b.
Both the equilibrium price and quantity would decrease.
c.
The equilibrium price would increase, and the equilibrium quantity would decrease.
d.
The equilibrium price would decrease, and the equilibrium quantity would increase.
127.
What would happen to the equilibrium price and quantity of lattés if coffee shops began using a
machine that reduced the amount of labor necessary to produce them?
a.
Both the equilibrium price and quantity would increase.
b.
Both the equilibrium price and quantity would decrease.
c.
The equilibrium price would increase, and the equilibrium quantity would decrease.
d.
The equilibrium price would decrease, and the equilibrium quantity would increase.
128.
Saddle shoes are not popular right now, so very few are being produced. If saddle shoes become
popular, then how
will this affect the market for saddle shoes?
a.
The supply curve for saddle shoes will shift right, which will create a shortage at the current
price. Price will
increase, which will decrease quantity demanded and increase quantity
supplied. The new market equilibrium
will be at a higher price and higher quantity.
b.
The supply curve for saddle shoes will shift right, which will create a surplus at the current
price. Price will
decrease, which will increase quantity demanded and decrease quantity
supplied. The new market
equilibrium will be at a lower price and higher quantity.
c.
The demand curve for saddle shoes will shift right, which will create a shortage at the current
price. Price
will increase, which will decrease quantity demanded and increase quantity
supplied. The new market
equilibrium will be at a higher price and higher quantity.
d.
The demand curve for saddle shoes will shift right, which will create a surplus at the current
price. Price will
decrease, which will increase quantity demanded and decrease quantity
supplied. The new market
equilibrium will be at a lower price and higher quantity.
The Market Forces of Supply and Demand 999
129.
The market for diamond rings is closely linked to the market for high-quality diamonds. If a large
quantity of high-
quality diamonds enters the market, then the
a.
supply curve for diamond rings will shift right, which will create a shortage at the current
price. Price will
increase, which will decrease quantity demanded and increase quantity
supplied. The new market equilibrium
will be at a higher price and higher quantity.
b.
supply curve for diamond rings will shift right, which will create a surplus at the current price.
Price will
decrease, which will increase quantity demanded and decrease quantity supplied.
The new market
equilibrium will be at a lower price and higher quantity.
c.
demand curve for diamond rings will shift right, which will create a shortage at the current
price. Price will
increase, which will decrease quantity demanded and increase quantity
supplied. The new market equilibrium
will be at a higher price and higher quantity.
d.
demand curve for diamond rings will shift right, which will create a surplus at the current
price. Price will
decrease, which will increase quantity demanded and decrease quantity
supplied. The new market
equilibrium will be at a lower price and higher quantity.
130.
Music compact discs are normal goods. What will happen to the equilibrium price and quantity
of music compact
discs if musicians accept lower royalties, compact disc players become
cheaper, more firms start producing music
compact discs, and music lovers experience an
increase in income?
a.
Price will fall, and the effect on quantity is ambiguous.
b.
Price will rise, and the effect on quantity is ambiguous.
c.
Quantity will fall, and the effect on price is ambiguous.
d.
Quantity will rise, and the effect on price is ambiguous.
131.
What will happen to the equilibrium price of new textbooks if more students attend college,
paper becomes cheaper,
textbook authors accept lower royalties, and fewer used textbooks are
sold?
a.
Price will rise.
b.
Price will fall.
c.
Price will stay exactly the same.
d.
The price change will be ambiguous.
132.
New oak tables are normal goods. What would happen to the equilibrium price and quantity in
the market for oak
tables if the price of maple tables rises, the price of oak wood rises, more
buyers enter the market for oak tables,
and the price of the glue used in the production of the
new oak tables increased?
a.
Price will fall, and the effect on quantity is ambiguous.
b.
Price will rise, and the effect on quantity is ambiguous.
c.
Quantity will fall, and the effect on price is ambiguous.
d.
Quantity will rise, and the effect on price is ambiguous.
133.
What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts
went up, the price
of jelly fell, fewer firms decided to produce peanut butter, and health officials
announced that eating peanut butter
was good for you?
a.
Price will fall, and the effect on quantity is ambiguous.
b.
Price will rise, and the effect on quantity is ambiguous.
c.
Quantity will fall, and the effect on price is ambiguous.
d.
Quantity will rise, and the effect on price is ambiguous.
134.
Pens are normal goods. What will happen to the equilibrium price of pens if the price of pencils
rises, consumers
experience an increase in income, writing in ink becomes fashionable, people
expect the price of pens to rise in the
near future, the population increases, fewer firms
manufacture pens, and the wages of pen-makers increase?
a.
Price will rise.
b.
Price will fall.
c.
Price will stay exactly the same.
d.
The price change will be ambiguous.
135.
What will happen to the equilibrium price and quantity of traditional camera film if traditional
cameras become more
expensive, digital cameras become cheaper, the cost of the resources
needed to manufacture traditional film falls,
and more firms decide to manufacture traditional
film?
a.
Price will fall, and the effect on quantity is ambiguous.
b.
Price will rise, and the effect on quantity is ambiguous.
c.
Quantity will fall, and the effect on price is ambiguous.
d.
Quantity will rise, and the effect on price is ambiguous.
136.
New cars are normal goods. What will happen to the equilibrium price of new cars if the price
of gasoline rises, the
price of steel falls, public transportation becomes cheaper and more
comfortable, auto-workers accept lower
wages, and automobile insurance becomes more
expensive?
a.
Price will rise.
b.
Price will fall.
c.
Price will stay exactly the same.
d.
The price change will be ambiguous.
137.
What will happen to the equilibrium price and quantity of new cars if the price of gasoline rises,
the price of steel
rises, public transportation becomes cheaper and more comfortable, and auto-
workers negotiate higher wages?
a.
Price will fall, and the effect on quantity is ambiguous.
b.
Price will rise, and the effect on quantity is ambiguous.
c.
Quantity will fall, and the effect on price is ambiguous.
d.
Quantity will rise, and the effect on price is ambiguous.
138.
Consider the market for new DVDs. If DVD players became cheaper, buyers expected DVD
prices to fall next
year, used DVDs became more expensive, and DVD production technology
improved, then the equilibrium price of
a new DVD would
a.
rise.
b.
fall.
c.
stay the same.
d.
could rise, fall, or remain unchanged.
139.
Which of the following sets of events must cause an increase in the price of a new house?
a.
higher wages for carpenters, higher wood prices, increases in consumer incomes, higher
apartment rents,
increases in population, and expectations of higher house prices in the future
b.
lower wages for carpenters, lower wood prices, increases in consumer incomes, higher
apartment rents,
increases in population and expectations of higher house prices in the future
c.
lower wages for carpenters, higher wood prices, decreases in consumer incomes, higher
apartment rents,
decreases in population and expectations of higher house prices in the future
d.
higher wages for carpenters, lower wood prices, decreases in consumer incomes, lower
apartment rents,
decreases in population and expectations of lower house prices in the future
140.
What would happen to the equilibrium price and quantity of lattés if coffee shops began using a
machine that
reduced the amount of labor necessary to produce steamed milk, which is used to
make lattés, and scientists
discovered that coffee prevents heart attacks?
a.
Both the equilibrium price and quantity would increase.
b.
Both the equilibrium price and quantity would decrease.
c.
The equilibrium price would increase, and the effect on equilibrium quantity would be
ambiguous.
d.
The equilibrium quantity would increase, and the effect on equilibrium price would be
ambiguous.
141.
What would happen to the equilibrium price and quantity of lattés if coffee shops began using a
machine that
reduced the amount of labor necessary to produce steamed milk, which is used to
make lattés, and scientists
discovered that lattés cause heart attacks?
a.
Both the equilibrium price and quantity would increase.
b.
Both the equilibrium price and quantity would decrease.
c.
The equilibrium price would decrease, and the effect on equilibrium quantity would be
ambiguous.
d.
The equilibrium quantity would decrease, and the effect on equilibrium price would be
ambiguous.
142.
What would happen to the equilibrium price and quantity of lattés if the cost to produce steamed
milk, which is used
to make lattés, increased, and scientists discovered that lattés cause heart
attacks?
a.
Both the equilibrium price and quantity would increase.
b.
Both the equilibrium price and quantity would decrease.
c.
The equilibrium price would decrease, and the effect on equilibrium quantity would be
ambiguous.
d.
The equilibrium quantity would decrease, and the effect on equilibrium price would be
ambiguous.
143.
Consider the market for portable air conditioners in equilibrium. When a heat wave strikes the
equilibrium price
a.
and quantity both decrease.
b.
and quantity both increase.
c.
increases, and the equilibrium quantity decreases.
d.
decreases, and the equilibrium quantity increases.
144.
Consider the market for portable air conditioners in equilibrium. A summer of unseasonably cool
weather would
cause
a.
both the equilibrium price and quantity to decrease.
b.
both the equilibrium price and quantity to increase.
c.
the equilibrium price to increase and the equilibrium quantity to decrease.
d.
the equilibrium price to decrease and the equilibrium quantity to increase.
The Market Forces of Supply and Demand 1007
Figure 4-23
145.
Refer to Figure 4-23. In this market for watermelons, a severe drought occurs which affects
the watermelon
crop. The equilibrium price
a.
increases and the equilibrium quantity decreases.
b.
decreases and the equilibrium quantity is ambiguous.
c.
and quantity both increase.
d.
and quantity both decrease.
146.
Refer to Figure 4-23. In this market for sunscreen, there is a decrease in the price of zinc
oxide, an input into
sunscreen, and more producers enter the market. The equilibrium price
a.
increases and the equilibrium quantity decreases.
b.
decreases and the equilibrium quantity increases.
c.
is ambiguous and the equilibrium quantity increases.
d.
decreases and the equilibrium quantity is ambiguous.
Figure 4-24
The diagram below pertains to the demand for turkey in the United States.
147.
Refer to Figure 4-24. All else equal, an increase in the income of buyers who consider turkey
to be an inferior
good would cause a move from
a.
DA to DB.
b.
DB to DA.
c.
x to y.
d.
y to x.
148.
Refer to Figure 4-24. All else equal, a sale on chicken would cause a move from
a.
DA to DB.
b.
DB to DA.
c.
x to y.
d.
y to x.
149.
Refer to Figure 4-24. All else equal, the approach of Thanksgiving would cause a move from
a.
DA to DB.
b.
DB to DA.
c.
x to y.
d.
y to x.
150.
Refer to Figure 4-24. All else equal, buyers expecting turkey to be more expensive in the
future would cause a
current move from
a.
DA to DB.
b.
DB to DA.
c.
x to y.
d.
y to x.
151.
Refer to Figure 4-24. All else equal, a large number of people becoming vegetarians would
cause a move from
a.
DA to DB.
b.
DB to DA.
c.
x to y.
d.
y to x.
152.
Refer to Figure 4-24. All else equal, the premature deaths of thousands of turkeys would
cause a move from
a.
DA to DB.
b.
DB to DA.
c.
x to y.
d.
y to x.
153.
Refer to Figure 4-24. All else equal, an increase in the productivity of turkey farmers would
cause a move from
a.
DA to DB.
b.
DB to DA.
c.
x to y.
d.
y to x.
154.
Refer to Figure 4-24. All else equal, a decrease in the price of the grain fed to turkeys would
cause a move from
a.
DA to DB.
b.
DB to DA.
c.
x to y.
d.
y to x.
155.
Refer to Figure 4-24. All else equal, sellers expecting the price of turkey to rise in the future
would cause a
current move from
a.
DA to DB.
b.
DB to DA.
c.
x to y.
d.
y to x.
Figure 4-25
The graph below pertains to the supply of paper to colleges and universities.
156.
Refer to Figure 4-25. All else equal, an increase in the use of laptop computers for note-taking
would cause a
move from
a.
x to y.
b.
y to x.
c.
SA to SB.
d.
SB to SA.
157.
Refer to Figure 4-25. All else equal, buyers expecting paper to be more expensive in the future
would cause a
current move from
a.
x to y.
b.
y to x.
c.
SA to SB.
d.
SB to SA.
