Need help on microeconomic questions: 1. The early frost destroys a large percen

Question

Need help on microeconomic questions:

1. The early frost destroys a large percentage of the grape crop in Canada. What is the effect on 1. Demand, 2. Supply, 3. Price, and 4.quantify respectively, in the Canadian Wine market?

a) 1. does not change, 2. decreases, 3. increases, 4. decreases

b) 1. does not change, 2. decreases, 3. decreases, 4. Increases

c) 1. Decreases, 2. Decreases, 3. Decreases, 4. Does not change

d) 1. Increases, 2. decreases, 3. Does not change, 4. Increases

e). 1. Does not change, 2. Increases, 3. Decreases, 4.Increases

2. Large gold deposits are discovered in northern Canada. What is the effect on 1. Demand, 2. Supply, 3.price and 4. Quantity respectively, in the gold market?

a) 1. does not change, 2. decreases, 3. increases, 4. decreases

b) 1. increases, 2. Does not change 3. increases, 4. Increases

c) 1. Does not change, 2. Does not change, 3. Does not change, 4. Increases

d) 1. Does not change, 2. Increases, 3. Decreases, 4 increases

e) 1. Decreases, 2. Increases, 3. Does not change, 4. Does not change

3. There is increasing concern by consumers about physical fitness. Also, the price of gasoline falls. What is the effect on 1. Demand, 2. Supply, 3.price and 4. Quantity respectively for the bike market?

a) 1. Increases, 2 does not change, 3. Decreases, 4 decreases

b) 1. Uncertain, 2. Does not change, 3. Uncertain, 4. Uncertain

c). 1.Increases, 2 does not change, 3. Increases, 4. Increases

d) 1.uncertain, 2.increases, 3.uncertain, 4. Uncertain

e) 1. Decreases, 2. Increases, 3. Decreases, 4. Decreases

4. The population of drinking age increases; also, brewery unions negotiate a big increase in wages. What is the effect on 1. Demand, 2. Supply, 3. Price and 4. Quantity respectively, in the beer market?

a) 1. Decreases, 2. Decreases, 3. Decreases, 4 uncertain

b) 1. Increases, 2 decreases, 3. Increases, 4. Increases

c) 1. Increases, 2 decreases, 3. Increases, 4. Decreases

d) 1 increases, 2.uncertain, 3. Uncertain, 4.uncertain

e) 1. Increases, 2. Decreases, 3.increases, 4.uncertain

5. House prices are expected to rise significantly in the near future. What is the effect on 1. Demand, 2. Supply, 3. Price and 4. Quantity respectively in the housing market?

a) 1. does not change, 2. Decreases, 3 increases, 4 decreases

b) 1 increases, 2. Increases, 3. Increases, 4. Uncertain

c) 1. Increases, 2 does not change, 3 increases, 4 increases

d) 1. Increases, 2, decreases, 3 increases, 4 uncertain

e) 1 increases, 2 increases, 3. Increases, 4.increases

Explanation / Answer

Ans 1) When the frost destroys grape the effect on 1) demand, 2)supply, 3)price and 4)quantity will be - a) 1) doesnot change 2) decreases 3) increases4) decreases.

It means that with the destruction caused by frost on grapes the supply of Canadian wine will suffer with a decrease in quantity produced . With the demand remaining the same or unchanged the price of wine shall increase with the fall in the supply and quantity produced.

Ans 2)

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