121. New cars are normal goods. What will happen gasoline rises, the price of st
ID: 1135124 • Letter: 1
Question
121. New cars are normal goods. What will happen gasoline rises, the price of steel falls, public transportation becomescape auto-workers accept lower wages, and automobile insurance becomes a. Price will rise. b. Price will fall. c. Price will stay exactly the same. d. The price change will be ambiguous to the equilibrium price of new cars if the price of more expensive? 122. What will happen to the equilibrium price and quantity of new cars if the price of gasoline rises, the price of steel rises, public transportation becomes cheaper and more comfortable, and auto-workers negotiate higher wages? a. Price will fall and the effect on quantity is ambiguous. b. Price will rise and the effect on quantity is ambiguous. c. Quantity will fall and the effect on price is ambiguous d. Quantity will rise and the effect on price is ambiguous. 123. Consider the market for new DVDs. If DVD players became cheaper, buyers expected DVD prices to fall next year, used DVDs became more expensive, and DVD production technology improved then we could safely conclude that the equilibrium price of a new DVD would a. rise b. fall. c. stay the same. d. We couldn't be sure what it might do. 124. Which of the following events will definitely cause equilibrium quantity to fall? a. demand increases and supply decreases b. demand and supply both decrease c. demand decreases and supply increases d. demand and supply both increase 125. Equilibrium quantity will unambiguously decrease when demand increases and supply does not change, when demand does not change and supply decreases, and when both demand and supply decrease. demand increases and supply does not change, when demand does not change and supply increases, and when both demand and supply decrease demand decreases and supply does not change, when demand does not change and supply increases, and when both demand and supply decrease. demand decreases and supply does not change, when demand does not change and supply decreases, and when both demand and supply decrease. a. b. c. d. 126. Which of the following events will definitely cause equilibrium quantity to rise? a. demand increases and supply decreases b. demand and supply both decrease c. demand decreases and supply increases d. demand and supply both increase 127. Equilibrium quantity will unambiguously increase when demand increases and supply does not change, when demand does not change and supply increases, and when both demand and supply increase. demand increases and supply does not change, when demand does not change and supply increases, and when both demand and supply decrease. a. b.Explanation / Answer
Ans:
121) Option B
price will fall
In this case, the demand for new cars will decrease due to increase in price of gasoline and cheaper public transport and the supply of new cars will increase due to fall in steel prices and lower wages.when demand decreases, the demand curve will shift to the left and when supply increases, supply curve will shift to the right causing the price to fall.
122) Option C
Quantity will fall and the effect on price is ambiguous.
The increase in price of gasoline and cheaper public transport will cause the demand for new cars to decrease and the demand curve will shift to the left.The rise in prices of steel and higher wages of workers will cause the supply of new cars to decrease and the supply curve will shift to the left.
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