Question : 51) Refer to Figure 3-8. The graph in this figure : 1245049

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). 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

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.

58) The following appeared in a Florida newspaper a week after a hurricane hit the state. “Floridians are relieved that the storm produced no fatalities but homeowners face weeks, if not months, of rebuilding. Matters are made worse by the soaring prices of plywood and other building materials that always follow in a hurricane’s path. Complaints of profiteering and price gouging have not deterred firms from raising their prices by over 100 percent.” Which of the following offers the best explanation for the price increases referred to in the article?

A) The hurricane reduced the number of suppliers of building materials.

B) The hurricane created an artificial shortage of building materials.

C) The hurricane caused an increase in the demand for building materials.

D) There was a reduction in supply as firms shipped plywood and other materials to locations not affected by the storm.

59) Which of the following would cause a decrease in the equilibrium price and an increase in the equilibrium quantity of salmon?

A) a decrease in demand and an increase in supply

B) an increase in supply

C) an increase in supply and an increase in demand greater than the increase in supply

D) a decrease in demand and a decrease in supply

60) Which of the following would cause an increase in the equilibrium price and an increase in the equilibrium quantity of watermelons?

A) an increase in demand and an increase in supply

B) an increase in supply

C) an increase in supply and an increase in demand greater than the increase in supply

D) a decrease in demand and an increase in supply