Question : Figure 3-8 48) Refer to Figure 3-8.  The graph in this : 1387410

Figure 3-8

48) Refer to Figure 3-8.  The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D2 and S1 (point C). If the price of motorcycle side cars (a complement to motorcycles) decreases, and the wages of motorcycle workers increase, how will the equilibrium point change?

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

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

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

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

49) Refer to Figure 3-8.  The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D2 and S2 (point E). If the technology to produce motorcycles improves and the number of buyers increases, how will the equilibrium point change?

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

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

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

D) The equilibrium point will remain at E.

50) 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 there is a surplus of motorcycles 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.

51) Refer to Figure 3-8.  The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles 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 motorcycles and decrease in the price of motorcycle insurance, a complement to motorcycles.

B) An increase in the wages of motorcycle workers and a decrease in the price of motorcycle insurance, a complement to motorcycles.

C) An increase in the number of motorcycle producers and an increase in the number of consumers who prefer riding motorcycles.

D) An increase in the wages of motorcycle workers and an increase in the price of motorcycle insurance, a complement to motorcycles.

52) 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 there is an increase in the wages of motorcycle workers and an increase in the price of motorcycle insurance, a complement to motorcycles, the equilibrium could move to which point?

A) A

B) B

C) C

D) E

53) 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 S2 (point B). f there is an increase in number of companies producing motorcycles and a decrease in income (assume motorcycles are a normal good), the equilibrium could move to which point?

A) A

B) B

C) C

D) E

54) Which of the following statements is true?

A) An increase in demand causes a change in equilibrium price; the change in price does not cause a further change in demand or supply.

B) A decrease in supply causes equilibrium price to rise; the increase in price then results in a decrease in demand.

C) If both demand and supply increase, there must be an increase in equilibrium price; equilibrium quantity may either increase or decrease.

D) If demand decreases and supply increases, one cannot determine if equilibrium price will increase or decrease without knowing which change is greater.

55) Which of the following statements is true?

A) An increase in supply causes a change in equilibrium price; the change in price does not cause a further change in demand or supply.

B) A decrease in supply causes equilibrium price to rise; the increase in price then results in a decrease in demand.

C) If both demand and supply increase, there must be an increase in equilibrium price; equilibrium quantity may either increase or decrease.

D) If demand decreases and supply increases, one cannot determine if equilibrium price will increase or decrease without knowing which change is greater.

56) A decrease in the equilibrium price for a product will result

A) when the quantity demanded for the product exceeds the quantity supplied.

B) when there is a decrease in supply and a decrease in demand for the product.

C) when there is an increase in supply and a decrease in demand for the product.

D) when there is a decrease in demand and a decrease in the number of firms producing the product.

57) A decrease in the equilibrium quantity for a product will result

A) when the quantity demanded for the product exceeds the quantity supplied.

B) when there is a decrease in supply and a decrease in demand for the product.

C) when there is an increase in supply and a decrease in demand for the product.

D) when there is a decrease in demand and a decrease in the number of firms producing the product.