16. (2 points) Suppose bottle and the equilibrium quantity has increased. These
ID: 1139657 • Letter: 1
Question
16. (2 points) Suppose bottle and the equilibrium quantity has increased. These changes are a result of the equilibrium price of bottled water has risen from $1.00 per bottle to $2.00 per a shift of the curve for bottled water. A. rightward; supply B. leftward; supply C. rightward; demand D. leftward; demand 16. 17. (2 points) Suppose that the market for engagement rings is in equilibrium. Then political unrest in South Africa shuts down the diamond mines there. South Africa is the world's primary supplier of diamonds. What will happen? A. The equilibrium quantity of engagement rings will decrease B. The equilibrium price of engagement rings will decrease C. The demand for engagement rings will decrease D. The supply of engagement rings will increase. 18. (2 points) What will happen to the equilibrium price and quantity of coffee if it is discovered to help prevent colds and, at the same time, Brazil and Vietnam emerge in the global market as massive producers of coffee? A. The qusntity will terase aud the effe nthe c is unecertain. B. The price will fall and the effect on the quantity is uncertain. C. The quantity will decrease and the price will rise. D. The quantity will increase and the price will remain unchanged. 18.Explanation / Answer
(16) (C)
When demand curve shifts rightward, both price and quantity will increase ceteris paribus.
(17) (A)
Shut-down of diamond mines, suppliers of inputs, will decrease the supply of rings, shifting its supply curve leftward which will increase price and decrease quantity.
(18) (A)
Positive health report about coffee consumption will increase its demand, shifting demand curve rightward which will increase price and increase quantity. New producers of coffee in market will increase its supply, shifting supply curve rightward which will decrease price and increase quantity. The net effect is a definite increase in quantity, but effect on price is uncertain.
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