Question : 111) What would happen in the market for knee replacement : 1245056

111) What would happen in the market for knee replacement surgery if insurance companies started to cover a smaller portion of the cost of the surgery, and fewer doctors decide to enter the field of joint replacement surgery?

A) Demand will decrease, but this will not shift the supply curve.

B) Supply will decrease, but this will not shift the demand curve.

C) Demand and supply will both decrease.

D) Demand will decrease and supply will increase.

112) Digital video recorders (DVRs) were introduced to the market in 1999, and new technology has allowed for the cost of manufacturing the recorders to decline significantly since the initial introduction. How did this change in technology affect the market for DVRs?

A) The new technology caused an increase in the supply of DVRs and a decrease in price of DVRs.

B) The new technology caused an increase in the supply of DVRs and an increase in price of DVRs.

C) The new technology caused an decrease in the demand for DVRs.

D) The new technology caused an increase in the quantity of DVRs supplied.

113) Suppose consumer preference for beef starts to rise while the cost of raising beef continues to rise. In the market for beef, this would be represented by the equilibrium price ________ and the equilibrium quantity ________.

A) increasing; increasing or decreasing

B) decreasing; increasing or decreasing

C) increasing or decreasing; increasing

D) increasing or decreasing; decreasing

114) “Because Coke and Pepsi are substitutes, a decrease in the price of Pepsi will cause the demand for Coke to decrease. This initial shift in demand for Coke results in a lower price for Coke; this lower price will cause the demand curve for Coke to shift to the left.” Which of the following correctly comments on this statement?

A) The statement will be true if consumer tastes for Coke and Pepsi do not change.

B) The statement is false because a change in the price of Coke would not change the demand for Coke.

C) The statement is false because Pepsi is an inferior good; Coke is a normal good.

D) The statement is false because one cannot assume that Coke and Pepsi are substitutes for all consumers. 

115) All else equal, the desired increase in the supply of smart phones for Google would cause the equilibrium price of the smart phones to ________ and the equilibrium quantity of the smart phones to ________.

A) increase; increase

B) increase; decrease

C) decrease; increase

D) decrease; decrease

116) Suppose a drought resulted in a major reduction in the California lettuce crop. In the market for lettuce

A) the supply curve shifted to the left resulting in an increase in the equilibrium price.

B) the supply curve shifted to the left resulting in a decrease in the equilibrium price.

C) the demand curve shifted to the right resulting in an increase in the equilibrium price.

D) the demand curve shifted to the left resulting in a decrease in the equilibrium price.

117) Studies have shown that smoking cigarettes can cause heart disease. Assume this is true, and favorable weather has increased the tobacco harvest in North Carolina. In the market for cigarettes, these two developments would

A) decrease demand and decrease supply, resulting in an increase in the equilibrium quantity and a decrease in the equilibrium price of cigarettes.

B) increase demand and increase supply resulting in an increase in the equilibrium quantity and an uncertain effect on the equilibrium price of cigarettes.

C) decrease demand and increase supply, resulting in a decrease in the equilibrium price and an uncertain effect on the equilibrium quantity of cigarettes.

D) decrease demand and increase supply, resulting in an increase in both the equilibrium price and the equilibrium quantity of cigarettes.

118) An increase in the demand for LED light bulbs due to changes in consumer tastes, accompanied by an increase in the supply of LED light bulbs as a result of government subsidies, will result in

A) an increase in the equilibrium quantity of LED light bulbs and no change in the equilibrium price.

B) an increase in the equilibrium price of LED light bulbs and no change in the equilibrium quantity.

C) an increase in the equilibrium price of LED light bulbs; the equilibrium quantity may increase or decrease.

D) an increase in the equilibrium quantity of LED light bulbs; the equilibrium price may increase or decrease.

119) Suppose a positive technological change in the production of disease-resistant corn caused the price of corn to fall. Holding everything else constant, how would this affect the market for wheat (a substitute for corn)?

A) The supply of wheat would increase and the equilibrium price of wheat would decrease.

B) The demand for wheat would decrease and the equilibrium price of wheat would decrease.

C) The demand for wheat would increase because consumers could afford to buy more wheat and corn.

D) The demand for wheat would decrease and the equilibrium price of wheat would increase.

Article Summary

A growing number of U.S. citizens are going to other countries for elective surgery procedures. Improved quality and significant cost savings abroad have attracted an increasing number of what are being referred to as American medical tourists, especially those who either do not have insurance or whose insurance does not cover the desired procedure. As few as five years ago, Americans tended to travel to countries such as Thailand or Mexico for the procedures, but many are now choosing to go to Europe, where governments and hospitals are now publicizing these services. Many of the procedures being done overseas are joint replacement, and partly in response to the number of patients going abroad for these procedures, programs are being developed to reduce the cost of these surgeries in the United States.

Source: Elizabeth Rosenthal, “The Growing Popularity of Having Surgery Overseas,” New York Times, August 6, 2013.

120) Refer to the Article Summary. If European governments and hospitals continue to publicize their existing services to American medical tourists and more Americans consider joint-replacement surgery to improve their quality of life, what will happen in the market for joint-replacement surgery as a result of these two factors?

A) Demand will increase, but these two factors will not shift the supply curve.

B) Supply will increase, but these two factors will not shift the demand curve.

C) Demand and supply will both increase.

D) Demand will increase and supply will decrease.