Question : 38) “The price of compact fluorescent light bulbs fell because : 1387409

38) “The price of compact fluorescent light bulbs fell because of improvements in production technology. As a result, the demand for incandescent light bulbs decreased. This caused the price of incandescent light bulbs to fall; as the price of incandescent light bulbs fell, the demand for incandescent light bulbs decreased even further.” Evaluate this statement.

A) The statement is false. A decrease in the price of compact fluorescent light bulbs would decrease the demand for incandescent light bulbs, but a decrease in the price of incandescent light bulbs would not cause the demand for incandescent light bulbs to decrease.

B) The statement is false because the demand for incandescent light bulbs would increase as the price of compact fluorescent light bulbs fell.

C) The statement is false because compact fluorescent light bulbs producers would not reduce their prices as a result of improvements in technology; doing so would reduce their profits.

D) The statement is false because it confuses the law of demand with the law of supply.

Figure 3-8

39) Refer to Figure 3-8.  The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D1 and S1 (point A). If the price of oranges, a substitute for apples, decreases and the wages of apple workers increase, how will the equilibrium point change?

A) The equilibrium point will move from A to E.

B) The equilibrium point will move from A to B.

C) The equilibrium point will move from A to C.

D) The equilibrium will first move from A to B, then return to A.

40) Refer to Figure 3-8.  The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D1 and S1 (point A). If there is a shortage of apples how will the equilibrium point change?

A) The equilibrium point will move from A to B.

B) The equilibrium point will move from A to C.

C) There will be no change in the equilibrium point.

D) The equilibrium point will move from A to E.

41) Refer to Figure 3-8.  The graph in this figure illustrates an initial competitive equilibrium in the market for sugar at the intersection of D1 and S1 (point A). If there is an increase in the price of fertilizer used on sugar cane and there is a decrease in tastes for sugar-sweetened soft drinks, how will the equilibrium point change?

A) The equilibrium point will move from A to B.

B) The equilibrium point will move from A to C.

C) There will be no change in the equilibrium point.

D) The equilibrium point will move from A to E.

42) Refer to Figure 3-8.  The graph in this figure illustrates an initial competitive equilibrium in the market for sugar at the intersection of D1 and S2 (point B). If there is a decrease in the price of fertilizer used on sugar cane and there is a decrease in tastes for sugar-sweetened soft drinks, how will the equilibrium point change?

A) The equilibrium point will move from B to A.

B) The equilibrium point will move from B to C.

C) There will be no change in the equilibrium point.

D) The equilibrium point will move from B to E.

43) Refer to Figure 3-8.  The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D2 and S2 (point E). Which of the following changes would cause the equilibrium to change to point A?

A) A positive change in the technology used to produce apples and decrease in the price of oranges, a substitute for apples.

B) An increase in the wages of apple workers and a decrease in the price of oranges, a substitute for apples.

C) An increase in the number of apple producers and a decrease in the number of apple trees as a result of disease.

D) A decrease in the wages of apple workers and an increase in the price of oranges, a substitute for apples.

44) Refer to Figure 3-8.  The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D2 and S1 (point C). Which of the following changes would cause the equilibrium to change to point B?

A) A positive change in the technology used to produce apples and decrease in the price of oranges, a substitute for apples.

B) An increase in the wages of apple workers and an increase in the price of oranges, a substitute for apples.

C) An increase in the number of apple producers and a decrease in the number of apple trees as a result of disease.

D) A decrease in the wages of apple workers and an increase in the price of oranges, a substitute for apples.

45) Refer to Figure 3-8.  The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D1 and S2 (point B). Which of the following changes would cause the equilibrium to change to point C?

A) A positive change in the technology used to produce apples and decrease in the price of oranges, a substitute for apples.

B) An increase in the wages of apple workers and an increase in the price of oranges, a substitute for apples.

C) An increase in the number of apple producers and a decrease in the number of apple trees as a result of disease.

D) A decrease in the wages of apple workers and an increase in the price of oranges, a substitute for apples.

46) Refer to Figure 3-8.  The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D1 and S1 (point A). If there is an increase in the wages of apple workers and an increase in the price of oranges, a substitute for apples, the equilibrium could move to which point?

A) none of the points shown

B) B

C) C

D) E

47) Refer to Figure 3-8.  The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D1 and S1 (point A). If the price of motorcycle engines increases, and the wages of motorcycle workers increase, how will the equilibrium point change?

A) The equilibrium point will move from A to E.

B) The equilibrium point will move from A to B.

C) The equilibrium point will move from A to C.

D) The equilibrium will first move from A to B, then return to A.