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Chapter 4/The Market Forces of Supply and Demand ❖ 71
Quick Check Multiple Choice
Problems and Applications
1. a. Cold weather damages the orange crop, reducing the supply of oranges and raising the
Figure 6
shows.
72 ❖ Chapter 4/The Market Forces of Supply and Demand
Figure 7
In addition, some people who already own Cadillacs will try to sell them. The result is
that the demand curve for used Cadillacs shifts to the left, while the supply curve shifts
to the right, as shown in Figure 9. The result is a decline in the equilibrium price of used
Cadillacs.
Figure 8 Figure 9
2. The statement is false. As Figure 10 shows, in equilibrium the increase in demand for
Chapter 4/The Market Forces of Supply and Demand ❖ 73
Figure 10 Figure 11
3. a. If people decide to have more children, they will want larger vehicles for hauling their
Figure 12 Figure 13
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b. If a strike by steelworkers raises steel prices, the cost of producing a minivan rises and
the supply of minivans decreases. Demand will not be affected. The result is a rise in the
price of minivans and a decline in the quantity sold, as Figure 13 shows.
Figure 14
12 shows.
e. The reduction in peoples' wealth caused by a stock-market crash reduces their income,
Figure 15
4. a. DVDs and TV screens are likely to be complements because you cannot watch a DVD
substitutes for the same reason.
Figure 16.
Figure 16
Figure 17.
Figure 17
76 ❖ Chapter 4/The Market Forces of Supply and Demand
The reduction in the price of TV screens would cause a decline in the demand for movie
tickets because TV screens and movie tickets are substitute goods. The decline in the
demand for movie tickets would lead to a decline in the equilibrium price and quantity
sold. This is shown in Figure 18.
Figure 18
5. Technological advances that reduce the cost of producing computer chips represent a decline
rises, as the figure shows.
Figure 19
