Question : 29) Assume that both the demand curve and the supply : 1388158

 

29) 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.

 

 

30) 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.

 

 

31) 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.

 

32) “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.

 

 

Figure 3-8

 

 

33) 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.

 

34) 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.

 

 

35) 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.

 

 

36) 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.

 

37) 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.

 

 

38) 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

 

 

39) 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).  If 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