Question : 11) Prices of California Merlot wine (assume that this a : 1245045

11) Prices of California Merlot wine (assume that this is a normal good) have risen steadily in recent years. Over this same period, prices for French oak barrels used for wine storage have dropped and consumer incomes have risen. Which of the following best explains the rising prices of California Merlots?

A) The supply curve for Merlot has shifted to the right while the demand curve for Merlot has shifted to the left.

B) The demand curve for Merlot has shifted to the right more than the supply curve has shifted to the right.

C) The demand curve and the supply curve for Merlot have both shifted to the left.

D) The supply curve for Merlot has shifted to the right more than the demand curve has shifted to the right.

12) Prices of microbrewery beer (assume that this is a normal good) have risen steadily in recent years. Over this same period, prices for fermenting vats used in beer making have also risen and consumer incomes have fallen. Which of the following best explains the rising prices of microbrewery beer?

A) The supply curve for microbrewery beer has shifted to the left while the demand curve for microbrewery beer has shifted to the right.

B) The demand curve for microbrewery beer has shifted to the left more than the supply curve has shifted to the left.

C) The demand curve and the supply curve for microbrewery beer have both shifted to the right.

D) The supply curve for microbrewery beer has shifted to the left more than the demand curve has shifted to the left.

13) In recent years the cost of producing organic produce in the U.S. has decreased largely due technological advancement. At the same time, more and more Americans prefer organic produce over conventional produce. Which of the following best explains the effect of these events in the organic produce market?

A) The supply curve has shifted to the left and the demand curve has shifted to the right. As a result there has been an increase in the equilibrium quantity and an uncertain effect on the equilibrium price.

B) Both the supply and demand curves have shifted to the right. As a result, there has been an increase in the equilibrium quantity and an uncertain effect on the equilibrium price.

C) Both the supply and demand curves have shifted to the right. As a result, there has been an increase in both the equilibrium price and the equilibrium quantity.

D) The supply curve has shifted to the left and the demand curve has shifted to the right. As a result, there has been an increase in the equilibrium price and an uncertain effect on the equilibrium quantity.

14) The cost of producing cigarettes in the U.S. has increased and at the same time, more and more Americans are choosing to not smoke cigarettes. Which of the following best explains the effect of these events in the cigarette market?

A) The supply curve has shifted to the right and the demand curve has shifted to the left. As a result there has been an increase in the equilibrium quantity and an uncertain effect on the equilibrium price.

B) Both the supply and demand curves have shifted to the right. As a result, there has been an increase in the equilibrium quantity and an uncertain effect on the equilibrium price.

C) Both the supply and demand curves have shifted to the left. As a result, there has been a decrease in the equilibrium quantity and an uncertain effect on the equilibrium price.

D) The supply curve has shifted to the right and the demand curve has shifted to the left. As a result, there has been an increase in the equilibrium price and an uncertain effect on the equilibrium quantity.

15) An article in the Wall Street Journal in early 2001 noted two developments in the market for laser eye surgery. The first development concerned side effects from the surgery, including blurred vision. The second development was that the companies renting eye-surgery machinery to doctors had reduced their charges. In the market for laser eye surgeries, these two developments

A) decreased demand and decreased supply, resulting in a decrease in the equilibrium quantity and an increase in the equilibrium price of laser eye surgeries.

B) decreased demand and increased supply resulting in an increase in both the equilibrium quantity and the equilibrium price of laser eye surgeries.

C) decreased demand and increased supply, resulting in a decrease in the equilibrium price and an uncertain effect on the equilibrium quantity of laser eye surgeries.

D) decreased demand and increased supply, resulting in a decrease in both the equilibrium price and the equilibrium quantity of laser eye surgeries.

16) An increase in the demand for lobster due to changes in consumer tastes, accompanied by a decrease in the supply of lobster as a result bad weather reducing the number of fishermen trapping lobster, will result in

A) a decrease in the equilibrium quantity of lobster and no change in the equilibrium price.

B) an increase in the equilibrium price of lobster and no change in the equilibrium quantity.

C) an increase in the equilibrium price of lobster; the equilibrium quantity may increase or decrease.

D) a decrease in the equilibrium quantity of lobster; the equilibrium price may increase or decrease.

17) A decrease in the demand for soft drinks due to changes in consumer tastes, accompanied by an increase in the supply of soft drinks as a result of reductions in input prices, will result in

A) a decrease in the equilibrium quantity of soft drinks and no change in the equilibrium price.

B) a decrease in the equilibrium price of soft drinks and no change in the equilibrium quantity.

C) a decrease in the equilibrium price of soft drinks; the equilibrium quantity may increase or decrease.

D) an increase in the equilibrium quantity of soft drinks; the equilibrium price may increase or decrease.

Figure 3-7

18) Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for bicycle helmets. Which panel best describes what happens in this market if there is a substantial increase in the price of bicycles?

A) Panel (a)

B) Panel (b)

C) Panel (c)

D) Panel (d)

19) Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for women’s clothing. Which panel best describes what happens in this market when the wages of seamstresses rise?

A) Panel (a)

B) Panel (b)

C) Panel (c)

D) Panel (d)

20) Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for almonds. Which panel best describes what happens in this market when there is an increase in the productivity of almond harvesters?

A) Panel (a)

B) Panel (b)

C) Panel (c)

D) Panel (d)