Question 1

Wheat is an important part of the Arab diet. Wheat farmers in Saudi Arabia industry have almost been put out of business by water shortages. How will this affect the equilibrium price and quantity of wheat?

Accepted Answer

The answer of Wheat is an important part of the...

Question 2

"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.

Accepted Answer

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.

Question 3

Google launched Ahlan Online

Accepted Answer

A)  in response to the growing Arab world demand for internet navigation. 
B)  to meet the needs of the Arab culture. 
C)  to facilitate on -line shopping. 
D)  to attract more Arab youth to use Google.

Question 4

-Refer to Table 3 -2. The table contains information about the wheat market. Use the table to answer the following questions.
a. What are the equilibrium price and quantity of wheat?
b. Suppose the prevailing price is US$6 per bushel. Is there a shortage or a surplus in the market?
c. What is the quantity of the shortage or surplus?
d. How many bushels will be sold if the market price is US$6 per bushel?
e. If the market price is US$6 per bushel, what must happen to restore equilibrium in the market?
f. At what price will suppliers be able to sell 36,000 bushels of wheat?
g. Suppose the market price is US$14 per bushel. Is there a shortage or a surplus in the market?
h. What is the quantity of the shortage or surplus?
i. How many bushels will be sold if the market price is US$14 per bushel?
j. If the market price is US$14 per bushel, what must happen to restore equilibrium in the market?

Accepted Answer

The answer of 
-Refer to Table 3 -2. The table...

Question 5

Supermarkets should not necessarily remove goods from their shelves even if they are not selling well. Which of the following explains this reasoning?

Accepted Answer

A)  If a slow -selling product is a complement of another product, removing the slow -seller would reduce sales of both products. 
B)  Removing slow -selling products will force consumers to buy these products at other stores. 
C)  If a slow -selling product is a new product it may become a best -seller in the future. 
D)  A profit can be made from a slow -selling good if it sells at a high price.

Question 6

To compete with the iPod from Apple, Microsoft began marketing its own digital music player, called Zune. The textbook mentioned one strategy Microsoft could use to overcome the advantages Apple has from selling the most popular brand of music player. What was this strategy?

Accepted Answer

A)  Microsoft could spend some of its large advertising budget to run television and magazine ads for Zune. 
B)  Microsoft is considering suing Apple for copyright infringement; Microsoft was the first company to develop the technology used to produce digital music players. 
C)  Microsoft could advertise Zune by sending emails to the many consumers who use the company's software. 
D)  Microsoft could try to sell Zune or downloaded songs at prices lower than those charged by Apple.

Question 7

In Saudi Arabia, the demand for chicken is lower in the summer than in the winter. If the price of chicken is higher in summer than in winter then:

Accepted Answer

A)  There are more substitutes for chicken in winter than there are in summer. 
B)  There is a shortage of chicken in spring and a surplus of chicken in summer. 
C)  Consumers' tastes for chicken are greater in summer than in winter. 
D)  The supply of chicken is greater in winter than in summer.

Exam 3: Where Prices Come From: The Interaction of Demand and Supply

Wheat is an important part of the Arab diet. Wheat farmers in Saudi Arabia industry have almost been put out of business by water shortages. How will this affect the equilibrium price and quantity of wheat?

Google launched Ahlan Online

Supermarkets should not necessarily remove goods from their shelves even if they are not selling well. Which of the following explains this reasoning?

To compete with the iPod from Apple, Microsoft began marketing its own digital music player, called Zune. The textbook mentioned one strategy Microsoft could use to overcome the advantages Apple has from selling the most popular brand of music player. What was this strategy?

In Saudi Arabia, the demand for chicken is lower in the summer than in the winter. If the price of chicken is higher in summer than in winter then: