Figure 3-6 Quantity of Ice Cream 17. In Figure 3-6, suppose D1 and Si indicate i

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Figure 3-6 Quantity of Ice Cream 17. In Figure 3-6, suppose D1 and Si indicate initial conditions in the market for ice cream. Which of the following changes would tend to cause a shift from Si to S2 in the market for ice cream? a. an increase in the price of sugar, an ingredient used to produce ice cream b. a decrease in the price of frozen yogurt, a substitute for ice cream c. abnormally hot weather that temporarily increases consumer desire for ice cream d. a decrease in the price of milk, an ingredient used to produce ice cream Figure 3-10 $25 $10 - $5 1 2 3 4 5 6 Quantity (in thousands) Figure 3-10 illustrates the conditions of demand and supply in the market for compact discs. Indicate the equilibrium price and quantity a. price, $20; quantity, 2,000 b. price, $15; quantity, 3,000 c. price, $10; quantity, 2,000 d. price, $10; quantity, 4,000 18.

Explanation / Answer

17.When supply curve shifts from S1 to S2,it means that the supply has risen.Supply can rise when the cost of production falls,so that the firm can produce more.When price of milk falls,the marginal cost of production falls,which leads to a shifts in the supply curve to the right.

Answer-d.

18.Market equilibrium occurs when quantity demanded=quantity supplied.

At price=15,Qd=Qs=3000.

Therefore,this is the point of equilibrium.

Answer-B.

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Figure 3-4 shows a semipermeable containing 4% NaCl 9% glucose and 10% albumin s

Figure 3-7 Bintu’s Production Possibilities Frontier Juba’s Production Possibili

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Figure 3-6 Quantity of Ice Cream 17. In Figure 3-6, suppose D1 and Si indicate i

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