Question : 91) Studies have shown that drinking one glass of red : 1245053

91) Studies have shown that drinking one glass of red wine per day may help prevent heart disease. Assume this is true, and a fungal disease destroys a large portion of the grape harvest of California vineyards. In the market for red wine, these two developments would

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

B) increase demand and decrease supply resulting in a decrease in both the equilibrium quantity and the equilibrium price of red wine.

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

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

92) A decrease in the demand for eggs due to changes in consumer tastes, accompanied by a decrease in the supply of eggs as a result of an outbreak of Avian flu, will result in

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

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

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

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

93) An increase in the demand for peanuts due to changes in consumer tastes, accompanied by an increase in the supply of peanuts as a result of favorable growing conditions, will result in

A) an increase in the equilibrium quantity of peanuts and no change in the equilibrium price.

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

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

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

94) During the 1990s positive technological change in the production of chicken caused the price of chicken to fall. Holding everything else constant, how would this affect the market for pork (a substitute for chicken)?

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

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

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

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

95) A decrease in input costs in the production of LCD televisions caused the price of LCD televisions to decrease. Holding everything else constant, how would this affect the market for video game consoles (a complement to LCD televisions)?

A) The supply of video game consoles would increase and the equilibrium price of video game consoles would decrease.

B) The demand for video game consoles would decrease and the equilibrium price of video game consoles would decrease.

C) The demand for video game consoles would decrease because consumers could afford to buy fewer LCD televisions and video game consoles.

D) The demand for video game consoles would increase and the equilibrium price of video game consoles would increase.

96) Assume that both the demand curve and the supply curve for DVD players shift to the left but the demand curve shifts more than the supply curve. As a result

A) both the equilibrium price and quantity of DVD players will decrease.

B) the equilibrium price of DVD players will decrease; the equilibrium quantity may increase or decrease.

C) the equilibrium price of DVD players may increase or decrease; the equilibrium quantity will decrease.

D) the equilibrium price of DVD players will increase; the equilibrium quantity may increase or decrease.

97) Assume that both the demand curve and the supply curve for DVD players shift to the left but the supply curve shifts more than the demand curve. As a result

A) both the equilibrium price and quantity of DVD players will decrease.

B) the equilibrium price of DVD players will decrease; the equilibrium quantity may increase or decrease.

C) the equilibrium price of DVD players may increase or decrease; the equilibrium quantity will increase.

D) the equilibrium price of DVD players will increase; the equilibrium quantity will decrease.

98) Assume that the demand curve for DVD players shifts to the left and the supply curve for DVD players shifts to the right, but the supply curve shifts more than the demand curve. As a result

A) both the equilibrium price and quantity of DVD players will decrease.

B) the equilibrium price of DVD players will decrease; the equilibrium quantity may increase or decrease.

C) the equilibrium price of DVD players may increase or decrease; the equilibrium quantity will increase.

D) the equilibrium price of DVD players will decrease; the equilibrium quantity will increase.

99) Assume that the demand curve for DVD players shifts to the left and the supply curve for DVD players shifts to the right, but the supply curve shifts less than the demand curve. As a result

A) both the equilibrium price and quantity of DVD players will decrease.

B) the equilibrium price of DVD players will decrease; the equilibrium quantity may increase or decrease.

C) the equilibrium price of DVD players may increase or decrease; the equilibrium quantity will increase.

D) the equilibrium price of DVD players will decrease; the equilibrium quantity will increase.

100) “The price of digital cameras fell because of improvements in production technology. As a result, the demand for non-digital cameras decreased. This caused the price of non-digital cameras to fall; as the price of non-digital cameras fell the demand for non-digital cameras decreased even further.” Evaluate this statement.

A) The statement is false because the demand for non-digital cameras would increase as the price of digital cameras fell.

B) The statement is false. A decrease in the price of digital cameras would decrease the demand for non-digital cameras, but a decrease in the price of non-digital cameras would not cause the demand for non-digital cameras to decrease.

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

D) The statement is false because digital camera producers would not reduce their prices as a result of improvements in technology; doing so would reduce their profits.