Deck 4: Bringing Supply and Demand Together

Question 1

TABLE 4-1

Refer to Table 4-1.At a price of $10,what is the result in the market?

A)There is a shortage of 6500 pizzas.
B)There is a surplus of 6500 pizzas.
C)There is a shortage of 4500 pizzas.
D)There is a surplus of 4500 pizzas.

Answer 1

There is a surplus of 4500 pizzas.

Question 2

FIGURE 4-1

Refer to Figure 4-1.If a price ceiling of $2 is imposed,how many units of butter will be sold?

A)3000
B)4000
C)5000
D)8000

Answer 2

3000

Question 3

FIGURE 4-1

Refer to Figure 4-1.If the current price of butter equals $5,what is the result in the market?

A)The market is not in equilibrium, and that the quantity supplied is greater than the quantity demanded.
B)The market is not in equilibrium, and that the quantity demanded is greater than the quantity supplied.
C)The market is in equilibrium at 8000 kilograms per year.
D)The market is in equilibrium at 2000 kilograms per year.

Answer 3

The market is not in equilibrium, and that the quantity supplied is greater than the quantity demanded.

Question 4

Are markets always in equilibrium?

A)Yes they are always in equilibrium because very few things tend to alter supply and demand.
B)No, but if there is no outside interference, they tend to move toward equilibrium.
C)No they are not always in equilibrium because they never "settle down" to a stable price and quantity.
D)Yes, they are always at the equilibrium point, or very close to it.

Question 5

TABLE 4-2

Refer to Table 4-2.If D₂ and S₁ represent the demand and supply schedules in a particular market,then what are the equilibrium price and quantity in that market?

A)a price of $12 and a quantity of 10 units
B)a price of $12 and a quantity of 9 units
C)a price of $10 and a quantity of 17 units
D)a price of $8 and a quantity of 15 units

Question 6

Which of the following statements describes equilibrium in a market?

A)At equilibrium, quantity demanded equals quantity supplied.
B)Equilibrium is a tendency for price to change, a state of perpetual motion.
C)At equilibrium, there will always be a surplus for consumers to purchase.
D)At equilibrium, market forces no longer apply.

Question 7

TABLE 4-2

Refer to Table 4-2.Suppose the demand schedule for Good A changes from D₁ to D₂ because the price of a related good,Good B,increases.Based on this,what can we conclude?

A)Good B is not related to Good A.
B)Good B is likely a substitute for Good A.
C)Good B is likely inferior to Good A.
D)Good B is likely a complement to Good A.

Question 8

TABLE 4-2

Refer to Table 4-2.Suppose that D₂ and S₁ are the prevailing demand and supply curves for a product.What happens in the market if the demand schedule changes from D₂ to D₁?

A)The equilibrium quantity increases from 13 to 18.
B)The equilibrium price decreases from $6 to $4.
C)The equilibrium quantity decreases from 15 to 13.
D)The equilibrium price increases from $6 to $8.

Question 9

Which of the following will result at the equilibrium price for gasoline?

A)Everyone with the desire and the income to buy gasoline at that price can do so.
B)Shortages will occur.
C)Quantity demanded exceeds the quantity supplied.
D)Surpluses are inevitable.

Question 10

What will occur in the market when there is an excess quantity demanded of a product at the current price?

A)The price will tend to rise.
B)The price will tend to fall.
C)Producers will reduce output and sales will fall.
D)The price must be above the equilibrium price.

Question 11

At the current market price for milk,the quantity of milk that sellers are willing and able to sell falls short of the quantity that buyers are willing and able to purchase.What is occurring in this situation?

A)A surplus of milk results.
B)The current market price must be equal to the equilibrium price of milk.
C)The current market price must exceed the equilibrium price of milk.
D)The current market price must be less than the equilibrium price of milk.

Question 12

TABLE 4-1

Refer to Table 4-1.What is the equilibrium price?

A)$6
B)$7
C)$8
D)$9

Question 13

TABLE 4-2

Refer to Table 4-2.If D₁ and S₁ represent the demand and supply schedules in a particular market,then what are the equilibrium price and quantity in that market?

A)a price of $8 and a quantity of 15 units
B)a price of $6 and a quantity of 13 units
C)a price of $4 and a quantity of 16 units
D)a price of $4 and a quantity of 11 units

Question 14

TABLE 4-2

Refer to Table 4-2.If D₂ and S₂ represent the demand and supply schedules in a particular market,then what are the equilibrium price and quantity in that market?

A)a price of $12 and a quantity of 12 units
B)a price of $10 and a quantity of 12 units
C)a price of $8 and a quantity of 15 units
D)a price of $6 and a quantity of 18 units

Question 15

FIGURE 4-1

Refer to Figure 4-1.If a price floor of $4 is imposed,how many units of butter will be sold?

A)3000
B)4000
C)5000
D)7000

Question 16

TABLE 4-2

Refer to Table 4-2.Suppose that D₁ and S₁ are the prevailing demand and supply curves for a product.What happens in the market if the demand schedule changes from D₁ to D₂?

A)The equilibrium price decreases from $6 to $4.
B)The equilibrium quantity increases from 13 to 18.
C)The equilibrium price increases from $6 to $8.
D)The equilibrium quantity decreases from 15 to 13.

Question 17

What is occurring in the market when there is an excess quantity supplied of a product at the current price?

A)The market price must be the equilibrium price.
B)The market price must be above equilibrium price.
C)The market price must be below equilibrium price.
D)The market price will tend to rise.

Question 18

FIGURE 4-1

Refer to Figure 4-1.What is the shortage or surplus that exists at a market price of $4?

A)a shortage exists equal to 4000 kilograms of butter
B)a surplus equal to 4000 kilograms of butter
C)a surplus equal to 7000 kilograms of butter
D)a shortage equal to 7000 kilograms of butter

Question 19

FIGURE 4-1

Refer to Figure 4-1.If a price ceiling of $4 is imposed,how many units of butter will be sold?

A)3000
B)4000
C)5000
D)7000

Question 20

FIGURE 4-1

Refer to Figure 4-1.What is the equilibrium price of butter?

A)$1
B)$2
C)$3
D)$5

Question 21

Whenever there is a surplus at a particular price,what will the quantity sold at that price be equal to?

A)the average of quantity supplied and quantity demanded
B)the quantity demanded at that price
C)the quantity supplied at that price
D)the quantity supplied minus the quantity demanded

Question 22

TABLE 4-3

Refer to Table 4-3.The government imposes a $1.20 price ceiling at the same time that there is a substantial decrease in the price of sport utility vehicles.(Assume that sport utility vehicles have very high fuel consumption.)What is the expected result?

A)The price of gasoline will equal $1.20 per litre, and a shortage of gasoline is created.
B)The price of gasoline will equal $1.20 per litre, and the quantity demanded equals the quantity supplied.
C)The price of gasoline will rise above $1.20 per litre, and a surplus of gasoline is created.
D)The price of gasoline will fall below $1.20 per litre, and a shortage of gasoline is created.

Question 23

TABLE 4-3

Refer to Table 4-3.What is the equilibrium price of gasoline?

A)$0.90
B)$1.00
C)$1.10
D)$1.20

Question 24

If a shortage currently exists in the market for strawberries,which of the following statements is most accurate?

A)The quantity of strawberries supplied exceeds the quantity demanded, and the market price is below the equilibrium price.
B)The quantity of strawberries supplied exceeds the quantity demanded, and the market price is above the equilibrium price.
C)The quantity of strawberries demanded exceeds the quantity supplied, and the market price is below the equilibrium price.
D)The quantity of strawberries demanded exceeds the quantity supplied, and the market price is above the equilibrium price.

Question 25

TABLE 4-2

Refer to Table 4-2.Suppose that D₁ and S₂ are the demand and supply schedules for Product A.What is the result if the government imposes a price floor of $12?

A)a shortage of 9 units
B)a shortage of 3 units
C)a surplus of 3 units
D)a surplus of 9 units

Question 26

TABLE 4-2

Refer to Table 4-2.Suppose that D₁ and S₂ are the demand and supply schedules for Product A.What will be the result if the government imposes a price ceiling of $10?

A)The ceiling will result in a surplus of 10 units.
B)The ceiling will result in a shortage of 4 units.
C)The ceiling will result in a surplus of 4 units.
D)The ceiling will have no impact on the quantity of Product A traded.

Question 27

If a surplus currently exists in the market for apples,which of the following statements is most accurate?

A)The quantity of apples demanded exceeds the quantity supplied, and the market price is below the equilibrium price.
B)The quantity of apples supplied exceeds the quantity demanded, and the market price is above the equilibrium price.
C)The quantity of apples supplied exceeds the quantity demanded, and the market price equals the equilibrium price.
D)The quantity of apples supplied exceeds the quantity demanded, and the market price is below the equilibrium price.

Question 28

TABLE 4-2

Refer to Table 4-2.Suppose the supply schedule for Good A changes from S₁ to S₂ because the price of Good B increases.Based on this,what can we conclude?

A)Goods A and B are likely complements in consumption.
B)Good B is not related to Good A.
C)Goods A and B are likely substitutes in production.
D)Goods A and B are likely substitutes in consumption.

Question 29

TABLE 4-2

Refer to Table 4-2.Suppose that D₁ and S₂ are the demand and supply schedules for Product A.What will result if the government imposes a price ceiling of $4?

A)a 10 unit surplus
B)a 5 unit surplus
C)a 5 unit shortage
D)a 10 unit shortage

Question 30

TABLE 4-2

Refer to Table 4-2.Suppose the demand schedule for Good A changes from D₁ to D₂ because the price of a related good,Good B,decreases.Based on this,what can we conclude?

A)Good B is likely a complement to Good A.
B)Good B is not related to Good A.
C)Good B is likely a substitute for Good A.
D)Good B is likely inferior to Good A.

Question 31

How would apple growers react to the news of medical research findings that suggest that eating apples,leads to greater health benefits than were previously known?

A)They would decrease the supply of apples.
B)They would decrease the quantity of apples supplied.
C)They would increase the quantity of apples supplied.
D)They would increase the supply of apples.

Question 32

TABLE 4-3

Refer to Table 4-3.Assuming the market for gasoline is initially in equilibrium and that sport utility vehicles have very high fuel consumption,what is likely to happen when there is a significant decrease in the price of sport utility vehicles?

A)The market price for gasoline will increase and the quantity demanded will decrease.
B)Both the market price and quantity of gasoline demanded will increase.
C)The market price of gasoline will decrease and the quantity demanded will increase.
D)The market price and quantity of gasoline will both decrease.

Question 33

A shortage exists in the market for corn at the prevailing price.What will eliminate the shortage?

A)A price decrease, increasing the quantity supplied and decreasing the quantity demanded.
B)A price increase, increasing the quantity supplied and decreasing the quantity demanded.
C)A price decrease, increasing the supply and decreasing the demand.
D)A price increase, increasing the supply and decreasing the demand.

Question 34

Assume that coffee and tea are substitutes for each other.If weather conditions cause a substantial portion of the available coffee crop to be destroyed,what will be the result?

A)The price of tea will decrease.
B)The supply of tea will increase.
C)The demand for tea will increase.
D)The price of coffee will decrease.

Question 35

TABLE 4-2

Refer to Table 4-2.Suppose that D₁ and S₂ are the demand and supply schedules for Product A.What will be the result if the government imposes a price ceiling of $6?

A)5 units of output will be traded.
B)Producers will be unable to sell all the units that they desire to at that price.
C)Consumers will be able to purchase as many units as desired at that price.
D)8 units of output will be traded.

Question 36

Which action will always result in a shortage?

A)when the government imposes a price ceiling below equilibrium price
B)when the government imposes a price ceiling above equilibrium price
C)when the government imposes a price floor below equilibrium price
D)when the government imposes a price floor above equilibrium price

Question 37

A surplus exists in the market for Barbie dolls at the prevailing price.What will eliminate the surplus?

A)A price decrease, decreasing the quantity supplied and increasing the quantity demanded.
B)A price decrease, decreasing the supply and increasing the demand.
C)A price increase, decreasing the supply and increasing the demand.
D)A price decrease, increasing the quantity supplied and increasing the quantity demanded.

Question 38

TABLE 4-2

Refer to Table 4-2.Suppose that D₁ and S₂ are the demand and supply schedules for Product A.What is the result if the government imposes a price floor of $10?

A)Producers will have produced a surplus of 12 units.
B)Consumers will be able to purchase as many units as desired at that price.
C)Consumers will face a shortage of 4 units.
D)Producers will be able to sell all the units that they desire to at that price.

Question 39

Whenever there is a shortage at a particular price,what will the quantity sold at that price be equal to?

A)the quantity supplied at that price
B)the average of quantity supplied and quantity demanded
C)the quantity demanded at that price
D)the quantity supplied minus the quantity demanded

Question 40

TABLE 4-3

Refer to Table 4-3.What will result if the government imposes a $1 price ceiling?

A)a 600 000 litre surplus
B)a 250 000 litre surplus
C)a 250 000 litre shortage
D)a 600 000 litre shortage

Question 41

If the price of ice cream increases substantially (ceteris paribus),what is the equilibrium quantity of hot fudge sauce likely to do?

A)Increase, and the equilibrium price is likely to increase.
B)Decrease, and the equilibrium price is likely to increase.
C)Increase, and the equilibrium price is likely to decrease.
D)Decrease, and the equilibrium price is likely to decrease.

Question 42

FIGURE 4-2

Refer to Figure 4-2.Which movement is consistent with an increase in supply?

A)from Point D to Point C
B)from Point C to Point D
C)from Point D to Point B
D)from Point B to Point D

Question 43

If an effective rent ceiling is implemented,what would happen in the market for apartment rentals?

A)The demand curve would not shift, resulting in a shortage of accommodations.
B)The demand curve would shift to the left, leading to a decrease in price.
C)The demand curve would not shift, resulting in a surplus of accommodations.
D)The demand curve would shift to the right, leading to an increase in price.

Question 44

Ceteris paribus,if the market demand for a product increases,what will happen to the equilibrium quantity and price of the product?

A)The quantity will increase and the price will be indeterminate.
B)The quantity will be indeterminate and the price will decrease.
C)The quantity will decrease and the price will decrease.
D)The quantity will increase and the price will increase.

Question 45

FIGURE 4-2

Refer to Figure 4-2.Under what circumstances would a movement from D₁ to D₂ occur?

A)if there is a decrease in the income of consumers and submarine sandwiches are inferior goods
B)if the price of bread used to make submarine sandwiches increases
C)if there is an increase in the income of consumers and submarine sandwiches are inferior goods
D)if the wages of submarine sandwich makers decrease

Question 46

FIGURE 4-2

Refer to Figure 4-2.Which movement of equilibrium illustrates a decrease in the quantity demanded,but NOT a decrease in demand?

A)from Point D to Point C
B)from Point D to Point B
C)from Point C to Point D
D)from Point B to Point D

Question 47

FIGURE 4-2

Refer to Figure 4-2.Which movement of equilibrium illustrates an increase in the quantity supplied,but NOT an increase in supply?

A)from Point B to Point D
B)from Point D to Point C
C)from Point D to Point B
D)from Point C to Point D

Question 48

A major grocery store chain switches from bagging groceries in paper sacks to bagging them in plastic bags.The grocery chain demands more plastic bags than are available at the current market price.What will happen as a result of this?

A)The market price for plastic bags is likely to increase.
B)There is an excess demand for groceries at the current market price.
C)The market price for paper sacks is likely to increase.
D)There is an excess demand for paper sacks at the current market price.

Question 49

If Canadian consumers decided to boycott grapes to protest working conditions of farm workers,everything else being equal,what can we expect?

A)The quantity of grapes supplied will fall.
B)The demand curve for grapes shifts to the right.
C)The supply of grapes will fall.
D)The price of grapes will rise.

Question 50

Many cooks view butter and margarine to be substitutes.If the price of butter rises,how will the market for margarine be affected?

A)The equilibrium price will rise, while the change to equilibrium quantity is indeterminate.
B)The equilibrium price will rise, and the equilibrium quantity will decrease.
C)The equilibrium price will rise, and the equilibrium quantity will rise.
D)The equilibrium price will fall, and the equilibrium quantity will fall.

Question 51

Ceteris paribus,if the market demand for a product decreases,what will happen to the equilibrium quantity and equilibrium price?

A)Quantity will be indeterminate and price will decrease.
B)Quantity and price will both increase.
C)Quantity will increase and price will be indeterminate.
D)Quantity and price will both decrease.

Question 52

Which of the following could be responsible for an increase in the price of wheat?

A)a simultaneous increase in supply and decrease in demand for wheat
B)a decrease in the demand for wheat
C)an increase in the demand for wheat
D)an increase in the supply of wheat

Question 53

In January,2500 litres of ice cream were sold in Fredericton at $2 per litre.In February,3000 litres were sold at $2.50 a litre.Which of the following is the most likely reason for this change in the price and quantity of ice cream sold?

A)the decision by Fredericton ice cream sellers to eliminate discount coupons
B)a reduction in wages in the Fredericton area
C)the release of a medical study showing that ice cream consumption improves mental health
D)the introduction of labour-saving, automated ice cream packing machinery

Question 54

What could explain an increase in the price and in the number of units sold of flour?

A)an increase in the supply of flour
B)a decrease in the expected future price of flour
C)an increase in the demand for flour
D)a decrease in the supply of flour

Question 55

FIGURE 4-2

Refer to Figure 4-2.Which movement is consistent with a decrease in demand?

A)from Point D to Point C
B)from Point D to Point B
C)from Point C to Point D
D)from Point B to Point D

Question 56

FIGURE 4-2

Refer to Figure 4-2.Under what circumstances would a movement from S₁ to S₂ occur?

A)an increase in the price of potato chips, a complement to submarine sandwiches
B)an increase in the price of wheat bread used to make submarine sandwiches
C)a reduction in the price of sliced beef used to make submarine sandwiches
D)an increase in the price of submarine sandwiches

Question 57

In September 2005,Hurricane Katrina,caused flood damage to many homes in Louisiana.Shortly thereafter,the price of plywood rose significantly.What do these events suggest?

A)An increase in the demand for plywood caused the price of plywood to rise.
B)A decrease in the supply of plywood caused the price of plywood to rise.
C)A decrease in the demand for plywood caused the price of plywood to rise.
D)An increase in the supply of plywood caused the price of plywood to rise.

Question 58

Medical authorities announced in the late 1980s that an acne medicine named Retin-A also had previously unknown wrinkle-reducing properties.What would an economist have expected to happen to the price and quantity sold of Retin-A after this announcement?

A)The price and quantity sold would have both fallen..
B)The price would have fallen and the quantity sold would have risen.
C)The price and quantity sold would have both risen.
D)The price would have risen and the quantity sold would have fallen.

Question 59

Hamburgers and fries are viewed by consumers to be complements.If the price of hamburgers falls,what will happen in the market for fries?

A)The supply of fries will increase.
B)The demand for fries will decrease.
C)The equilibrium quantity of fries supplied will increase.
D)The supply of fries will decrease.

Question 60

Good A (an inferior good)and Good B (a normal good)are viewed by consumers to be substitute products.Suppose that the price of Good B falls at the same time that consumer income increases.What is the net effect of these two events on equilibrium in the market for Good A?

A)an increase in equilibrium quantity and an indeterminate effect on price
B)a decrease in both the equilibrium price and quantity
C)an indeterminate effect on quantity but an increase in price
D)an increase in both the equilibrium price and quantity

Question 61

Which of the following would most likely increase the price of chicken?

A)unusually hot weather that kills millions of chickens before they are ready for market
B)a decrease in consumer income
C)a reduction in the price of grains used to produce chicken feed
D)a reduction in the price of beef, a substitute for chicken

Question 62

FIGURE 4-3

Refer to Figure 4-3.Starting with initial curves D₀ and S₀,which movement is consistent with a decrease in the price of cotton (a substitute)?

A)from Point A to Point D
B)from Point A to Point H
C)from Point A to Point B
D)from Point A to Point F

Question 63

You notice that the price of apple juice at your local grocery store has increased.Which of the following is NOT a possible explanation for the rise in the price of apple juice?

A)A recent scientific study is reported in the press that suggests that apple juice may be contaminated with pesticides.
B)Frosty weather destroys apples, causing the price of apples to increase.
C)Due to the bioengineering of apple trees, the domestic supply of apples increases.
D)As a result of an increase in income, consumers wish to purchase more apple juice at every price level.

Question 64

Which of the following events will cause the quantity of newspapers sold to decline?

A)Newspaper prices are reduced.
B)Newsprint becomes more expensive.
C)Magazine prices rise.
D)The printers' union makes wage concessions.

Question 65

Which of the following events will cause the supply curve of books (which are produced using paper made from trees)to shift to the left?

A)a sharp increase in the demand for and construction of wood-frame homes
B)a decline in college tuition
C)an increase in the supply of lumberjacks
D)an end to government regulations that limit timber harvesting in national forests

Question 66

FIGURE 4-3

Refer to Figure 4-3.Starting with initial curves D₀ and S₀,which movement is consistent with a successful advertising campaign that claims wool keeps you warm?

A)from Point A to Point H
B)from Point A to Point F
C)from Point A to Point D
D)from Point A to Point B

Question 67

In 1975,a pocket calculator cost more than $50; in 1990,a calculator of the same quality cost less than $10.Which of the following explanations is most consistent with these facts?

A)As the population grew, fewer expensive calculators were needed, causing prices to fall.
B)Intense competition in the calculator industry caused the supply curve for calculators to shift to the left, depressing the price.
C)An improvement in technology caused the supply of calculators to increase, depressing their price.
D)An increase in the demand for calculators led to the price drop.

Question 68

Reuters News Service reports: "Canadian automobile sales tumbled 15 percent in March (2009)." Which of the following would explain this sales drop?

A)The government has begun to subsidize automobile manufacturers.
B)Higher automobile prices have reduced demand.
C)The recession has reduced incomes and the demand for automobiles has contracted.
D)Producers have reacted to union concessions by increasing supply.

Question 69

In an effort to reduce the surplus of dairy products,agricultural legislation paid dairy farmers to slaughter their herds and sell them to packinghouses (meat producers)in 1996-1997.How did this influence the market for beef?

A)Demand increased, leading to higher beef prices.
B)Supply decreased, leading to higher beef prices.
C)Demand decreased, leading to lower beef prices.
D)Supply increased, leading to lower beef prices.

Question 70

FIGURE 4-3

Refer to Figure 4-3.Starting with initial curves D₀ and S₀,which movement is consistent with technological improvements in wool mills?

A)from Point A to Point B
B)from Point A to Point D
C)from Point A to Point I
D)from Point A to Point F

Question 71

Steel mill wage costs increase by 18 percent over a year.What is the likely economic effect on the market for steel?

A)There is an increase in the cost of producing steel, which shifts the supply curve of steel to the right, thereby increasing the price of steel.
B)There is an increase in the cost of producing steel, which shifts the supply curve of steel to the left, thereby increasing the price of steel.
C)The increase in wage costs will shift the demand curve for steel to the left, thereby increasing the cost of steel.
D)There is a decrease in the cost of producing steel, which shifts the supply curve of steel to the left, thereby increasing the price of steel.

Question 72

If the Canadian Auto Workers union obtains a substantial wage increase for its workers,the price of automobiles will rise.What kind of shift can this price increase be attributed to?

A)a shift to the left of the supply curve for automobiles
B)a shift to the right of the demand curve for automobiles
C)a shift to the left of the demand curve for automobiles
D)a shift to the right of the supply curve for automobiles

Question 73

FIGURE 4-3

Refer to Figure 4-3.Starting with initial curves D₀ and S₀,which movement is consistent with a strike by the Basque Shepherds Guild?

A)from Point A to Point D
B)from Point A to Point I
C)from Point A to Point H
D)from Point A to Point F

Question 74

A more efficient means of processing tree bark to produce an anticancer drug is discovered.How does this affect the supply curve for the drug?

A)It will shift to the right, increasing the price of the drug.
B)It will shift to the left, increasing the price of the drug.
C)It will shift to the left, decreasing the price of the drug.
D)It will shift to the right, decreasing the price of the drug.

Question 75

A more efficient process for refining oil into gasoline is developed.What will happen to the market price and quantity of gasoline as a result of this?

A)The price decreases and the quantity of gasoline purchased increases.
B)The price and the quantity of gasoline purchased both fall.
C)The price increases and the quantity of gasoline purchased falls.
D)The price and the quantity of gasoline purchased both increase.

Question 76

Coca-Cola bottlers increased their prices as the price of sugar (an important ingredient in producing Coke)rose sharply in the late 1980s.Under these circumstances,what caused the increase in the price of Coke?

A)a decrease in demand
B)an increase in supply
C)an increase in demand
D)a decrease in supply

Question 77

Suppose Canada steps up efforts to combat drug trafficking and,with the aid of the U.S.border patrol,intercepts a significant percentage of cocaine shipments.What will be the impact of this on the market for cocaine in Montréal?

A)The supply of cocaine will increase, causing the price of cocaine to increase.
B)The supply of cocaine will decrease, causing the price of cocaine to increase.
C)The demand for cocaine will increase, causing the price of cocaine to increase.
D)There will be a movement up along the supply curve of cocaine.

Question 78

FIGURE 4-3

Refer to Figure 4-3.Starting with initial curves D₀ and S₀,which movement is consistent with an increase in both income and population,assuming that wool products are normal goods?

A)from Point A to Point F
B)from Point A to Point D
C)from Point A to Point B
D)from Point A to Point H

Question 79

What will tend to happen in the market for ballet performances after the lighting and stage technician union wins a 17 percent wage increase for its members?

A)Ticket prices will rise and the number of performances will decline.
B)Ticket prices will fall and the number of performances will increase.
C)Ticket prices will rise and the number of performances will increase.
D)Ticket prices will fall and the number of performances will decline.

Question 80

Which of the following would cause the quantity of wheat bread demanded to increase,but NOT the demand for wheat?

A)a new scientific study demonstrating that wheat bread reduces the risk of colon cancer
B)a decrease in the price of rye bread
C)an increase in the number of farmers growing wheat
D)a reduction in the price of rye used to produce rye bread