Question : Figure 3-7 28) Refer to Figure 3-7.  Assume that the graphs : 1387408

Figure 3-7

28) Refer to Figure 3-7.  Assume that the graphs in this figure represent the demand and supply curves for frozen yogurt. Which panel describes what happens in the market for frozen yogurt when the price of ice cream, a substitute product, increases?

A) Panel (a)

B) Panel (b)

C) Panel (c)

D) Panel (d)

29) Refer to Figure 3-7.  Assume that the graphs in this figure represent the demand and supply curves for mustard and that bratwurst and mustard are complements. Which panel describes what happens in this market when the price of bratwurst falls?

A) Panel (a)

B) Panel (b)

C) Panel (c)

D) Panel (d)

30) Refer to Figure 3-7.  Assume that the graphs in this figure represent the demand and supply curves for coffee. What happens in this market if buyers expect the price of coffee to rise?

A) Panel (a)

B) Panel (b)

C) Panel (c)

D) Panel (d)

31) Refer to Figure 3-7.  Assume that the graphs in this figure represent the demand and supply curves for ramen noodles, an inferior good. Which panel describes what happens in this market as a result of an increase in income?

A) Panel (a)

B) Panel (b)

C) Panel (c)

D) Panel (d)

32) Positive technological change in the production of LCD televisions caused the price of LCD televisions to fall. Holding everything else constant, how would this affect the market for Blu-ray players (a complement to LCD televisions)?

A) The supply of Blu-ray players would increase and the equilibrium price of Blu-ray players would decrease.

B) The demand for Blu-ray players would increase and the equilibrium price of Blu-ray players would increase.

C) The demand for Blu-ray players would decrease because consumers could afford to buy fewer LCD televisions and Blu-ray players.

D) The demand for Blu-ray players would increase and the equilibrium price of Blu-ray players would decrease.

33) An increase in input costs in the production of electric automobiles caused the price of electric automobiles to rise. Holding everything else constant, how would this affect the market for gasoline-powered automobiles (a substitute for electric automobiles)?

A) The supply of gasoline-powered automobiles would increase and the equilibrium price of gasoline-powered automobiles would decrease.

B) The demand for gasoline-powered automobiles would increase and the equilibrium price of gasoline-powered automobiles would increase.

C) The demand for gasoline-powered automobiles would decrease because consumers could afford to buy fewer gasoline-powered automobiles.

D) The demand for gasoline-powered automobiles would increase and the equilibrium price of gasoline-powered automobiles would decrease.

34) Assume that both the demand curve and the supply curve for MP3 players shift to the right but the demand curve shifts more than the supply curve. As a result

A) both the equilibrium price and quantity of MP3 players will increase.

B) the equilibrium price of MP3 players will increase; the equilibrium quantity may increase or decrease.

C) the equilibrium price of MP3 players may increase or decrease; the equilibrium quantity will increase.

D) the equilibrium price of MP3 players will decrease; the equilibrium quantity may increase or decrease.

35) Assume that both the demand curve and the supply curve for MP3 players shift to the right but the supply curve shifts more than the demand curve. As a result

A) both the equilibrium price and quantity of MP3 players will decrease.

B) the equilibrium price of MP3 players will decrease; the equilibrium quantity will increase.

C) the equilibrium price of MP3 players may increase or decrease; the equilibrium quantity will decrease.

D) the equilibrium price of MP3 players will increase; the equilibrium quantity will decrease.

36) Assume that the demand curve for MP3 players shifts to the right and the supply curve for MP3 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 MP3 players will decrease.

B) the equilibrium price of MP3 players will decrease; the equilibrium quantity will increase.

C) the equilibrium price of MP3 players may increase or decrease; the equilibrium quantity will decrease.

D) the equilibrium price of MP3 players will increase; the equilibrium quantity will decrease.

37) Assume that the demand curve for MP3 players shifts to the right and the supply curve for MP3 players shift to the left, but the supply curve shifts less than the demand curve. As a result

A) both the equilibrium price and quantity of MP3 players will decrease.

B) both the equilibrium price and quantity of MP3 players will increase.

C) the equilibrium price of MP3 players may increase or decrease; the equilibrium quantity will decrease.

D) the equilibrium price of MP3 players will increase; the equilibrium quantity will decrease.