1) A rise in the wages of workers in the beef industry will: Decrease the supply

Question

1) A rise in the wages of workers in the beef industry will: Decrease the supply of beef, raising the equilibrium price and quantity of beef. Decrease the supply of beef, raising the equilibrium price, but lowering the equilibrium quantity of beef. Decrease the demand for beef, lowering the equilibrium price and quantity of beef. Decrease the supply beef, raising the equilibrium price and quantity of beef. Increase the demand for beef, raising the equilibrium price and quantity of beef. 2) If cigarettes are an inferior good, then a rise in consumer income will: Shift the supply of cigarettes in and to the left, raising the equilibrium price and quantity of cigarettes. Shift the demand for cigarettes in and to the left, raising the equilibrium price of cigarettes, but lowering the equilibrium price. Shift the supply of cigarettes in and to the left, increasing the equilibrium price of cigarettes, but lowering the equilibrium quantity. Shift the demand for cigarettes in and to the left, lowering the equilibrium price and quantity of cigarettes. Shift the supply of cigarettes out and to right, increasing the equilibrium price of cigarettes but decreasing the equilibrium quantity. 3) A price floor will: Set a price below the equilibrium price, creating an excess demand problem. Set a price below the equilibrium price, creating an excess supply problem. Set a price above the equilibrium price, creating an excess demand problem. Set a price above the equilibrium price, creating an excess supply problem. Set a price at the equilibrium price, making sure there are no excess supply or demand problems. 4) If new smoking ads increase the "taste" for cigarettes among teens then: The demand for cigarettes will shift in and to the left, raising the equilibrium price, but lowering the equilibrium quantity of cigarettes. The demand for cigarettes will shift out and to the right, raising the equilibrium price and quantity of cigarettes. The demand for cigarettes will shift in and to the left, lowering the equilibrium price and quantity of cigarettes. The supply of cigarettes will shift out and to the right, lowering the equilibrium price, but raising the equilibrium quantity of cigarettes. The supply of cigarettes will shift in and to the left, raising the equilibrium price, but lowering the equilibrium quantity of cigarettes. 5) A technological improvement in apple production will: Increase the supply apples, raising the equilibrium price and quantity of apples. Increase the supply of apples, lowering the equilibrium price and quantity of apples. Increase the supply of apples, lowering the equilibrium price but raising the equilibrium quantity of apples. Increase the demand for apples, lowering the equilibrium price but raising the equilibrium quantity of apples. Increase the supply of apples, raising the equilibrium price but lowering the equilibrium quantity of apples. 6) A large tax on a pack tax on cigarettes will: Shift the supply of cigarettes in and to the left, raising the equilibrium price and quantity of cigarettes. Shift the demand for cigarettes in and to the left, raising the equilibrium price of cigarettes, but lowering the equilibrium price. Shift the supply of cigarettes in and to the left, increasing the equilibrium price of cigarettes, but lowering the equilibrium quantity. Shift the demand for cigarettes in and to the left, lowering the equilibrium price and quantity of cigarettes. Shift the supply of cigarettes out and to right, increasing the equilibrium price of cigarettes, but decreasing the equilibrium quantity. 7)Which of the following will decrease gasoline consumption? Technological improvements in oil exploration. Rising consumer income. A tax on oil. A drop in car prices. Scaling back on investments in mass trans 8) If the price of bananas decrease, then: The demand for apples will increase, lowering the equilibrium price and quality of apples. The demand for apples will decrease, raising the equilibrium price of apples. The demand for apples will increase, raising the equilibrium price and quantity of apples. The demand for apples will decrease, lowering the equilibrium price and quantity of apples. The demand for apples will decrease, lowering the equilibrium price of apples but raising the equilibrium quantity. 9) A significant improvement in auto technology will: Shift the supply of cars in and to the left, raising the equilibrium price and quantity of cars. Shift the demand for cars in and to the left, raising the equilibrium price of cars, but lowering the equilibrium price. Shift the supply of cars in and to the left, increasing the equilibrium price of cars, but lowering the equilibrium quantity. Shift the demand for cars in and to the left, lowering the equilibrium price and quantity of cars. Shift the supply of cars out and to right, decreasing the equilibrium price of cars, but increasing the equilibrium quantity.

Explanation / Answer

1) A rise in the wages of workers in the beef industry will:

Decrease the supply of beef, raising the equilibrium price, but lowering the equilibrium quantity of beef.

Cost of production rises and less labor is hired. This reduces production and supply. Lowered supply results inlower equilibrium quanity but higher prices due to the the shortage that occurs.

2) If cigarettes are an inferior good, then a rise in consumer income will:

Shift the demand for cigarettes in and to the left, lowering the equilibrium price and quantity of cigarettes.

The consumer demands lower amount of cigarettes at every price level, thus demand curve shifts inwards and given supply, this means lower price and lower quantity at equilibrium.

3) A price floor will:

Set a price above the equilibrium price, creating an excess supply problem.

In this case, when price is set above the equilibrium, it becomes binding as prices cant fall below this level to the equilibrium. Thus the option of price is set below the equilibrium and creates excess demand wont happen as prices are allowed to rise above the minimum level set by the price floor to the equilibrium.

4) The demand for cigarettes will shift out and to the right, raising the equilibrium price and quantity of cigarettes.

Teens will demand more at every given price and this will make the demand curve shift to the right with given supply, raising the equilibrium price and quantity.

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