Which of the following is the best description of the effects of a decrease in t

Question

Which of the following is the best description of the effects of a decrease in the supply of brea? A) Consumers will pay more for bread. B) Bread prices will fall, and bread sales will rise. C) A permanent shortage of bread will remain on the market. D) Some bakeries will be forced out of business. Save Question 6 (1 point) d If the minimum wage is increased, then A) the unemployment rate among unskilled workers will fall. B) all families will benefit from higher incomes. C) employers will tend to replace unskilled workers with machines and skilled workers. D) firms will continue to hire the same number of unskilled workders Save Ouestion 7 (1 point)

Explanation / Answer

5. A) Consumers will pay more for the bread.

Decrease in supply does not affect demand and resulted into disequilibrium where demand exceeds supply which leads to higher prices paid by the consumers.

6. C) employers will tend to replace unskilled workers with machines and skilled workers

When minimum wage increases then it increases the expenditure of firms so they replace workers with machines or unskilled workers with skilled people.

7. D) an excess supply of rentals at the controlled price.

Rent control is the price which is set below equilibrium rent. At this rent, demand of rental houses are greater than its supply so there is excess demand rather than excess supply.

8. D) fewer people buying margarine.

Inferior goods are those goods whose income effect is negative which means increase in income decreases demand of inferior good. So, when consumer's income rises then demand of margarine falls.

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