O a movement toward the frontier from a point inside the frontier Question 28 1

Question

O a movement toward the frontier from a point inside the frontier Question 28 1 p Which of the following will cause a movement along the demand curve for oranges? O A change in the price of apples, a substitute for oranges O A news report predicting that the price of orange will ncrease next month. A change in the price of oranges O A change in the income of consumers. Question 29 1 pts Consider the market for Starbucks coffee. Suppose that the price of coffee beans (an input) increases, ile the price of tea (a substitute) increaset What is certain to happen in the market for Starbucks coffee? There will be a decrease in the equilibrium quantity of Starbucks coffee. There will be an increase in the equilibrium price of Starbucks coffee. There will be an increase in the equilibrium quantity of Starbucks coffee. There will be an increase in both the equilibrium price and quantity of Starbucks coffee. O O G There will be a decrease in the equilibrium price of Starbucks coffee. 1 nte

Explanation / Answer

28. The correct answer is: c)

Reason: a change in the price of the variable concerned (here, orange), will cause a movement along the demand curve.

29. The correct answer is: b)

Reason: the price of coffee rises due to both reasons- increase in the price of an input, coffee beans and the increase in the demand for coffee due to rise in the price of tea, a substitute.

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