An increase in price of inputs would be represented by a movement from A) B to A
ID: 1206496 • Letter: A
Question
An increase in price of inputs would be represented by a movement from A) B to A. B) S_2 to S_1. C) S_1 to S_2. D) A to B. 44) An increase in the number of firms in the market would be represented by a movement from A) S_1 to S_2. B) A to B. C) B to A. D) S_2 to S_1. 45) An increase in the price of substitutes in production would be represented by a movement from A) A to B. B) B to A. C) S_2 to S_1. D) S_1 to S_2. 46) A decrease in the price of the product would be represented by a movement from A) S_2 to S_1. B) A to B. C) S_1 to S_2. D) B to A. 47) Danielle Ocean pays for monthly pool maintenance for her home swimming pool. Last week the owner of the pool service informed Danielle that he will have to raise his monthly service fee because of increases in the price of pool chemicals. How is the market for pool maintenance services affected by this? A) There is a decrease in the quantity of pool maintenance services supplied. B) There is a decrease in the supply of pool maintenance services. C) There is an increase in the supply of pool maintenance services. D) There is a decrease in the demand for pool maintenance services. 48) Which of the following is the correct way to describe equilibrium in a market? A) At equilibrium, demand equals supply. B) At equilibnum, market forces no longer apply. C) At equilibrium quantity demanded equals quantity supplied. D) At equilibrium, scarcity is eliminated.Explanation / Answer
43. (b) S2 to S1 because increase in price of inputs increases the cost of production which force firms to reduce its supply.
44. (a) S1 to S2 as supply of good increases due to increase in the number of firms
45. (c) S2 to S1 because now firms are more interested in supplying of substitute good whose price is high.
46. (d) B to A as change in price of commodity leads to movement in the supply curve rather than shift. Decrease in price decreases the supply and vice-versa.
47. D) There is decrease in the demand for pool maintenance services.
48. C) At equilibrium, quantity demanded equals quantity supplied
47.
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