1. Table 4-12
A country club usually only allows members to purchasetickets for its celebrity golf
tournament, but the club is considering allowing non-membersto purchase tickets this year.
The demand and supply schedules are as follows: (insertTable 4-12). If both members and
non-members are allowed to purchase tickets to thisyear's celebrity golf tournament, then
what will be the equilibrium price?
Answer: $25
2. If consumers view cappuccinos and lattés as substitutes,what would happen to the
equilibrium price and quantity of lattés if the priceof cappuccinos rises?
Answer: Both the equilibrium price and quantity wouldincrease.
3. Figure 4-25
The graph below pertains to the supply of paper tocolleges and universities. All else equal,
an increase in the price of the pulp used in the paperproduction process would cause a
move from
Answer: SB to SA
4. New oak tables are normal goods. What would happento the equilibrium price and
quantity in the market for oak tables if the priceof maple tables rises, the price of oak wood
rises, more buyers enter the market for oak tables,and the price of the glue used in the
production of the new oak tables increased?
Answer: Price will rise, and the effect on quantityis ambiguous.
5. You lose your job and, as a result, you buy feweriTunes music downloads. This shows
that you consider iTunes music downloads to be a(n)
Answer: Normal good
6. Refer to Figure 4-7.
The shift from Db to Da is called
Answer: A decrease in demand
7. Suppose the income of buyers in a market for aninferior good decreases and a
technological advancement occurs also. What wouldwe expect to happen in the market?
Answer: Equilibrium quantity would increase, but theimpact on equilibrium price
would be ambiguous.
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101.What would happen to the equilibrium price and quantity of lattés if con-sumers’ incomes rise and lattés are a normal good?a.Both the equilibrium price and quantity would increase.b.Both the equilibrium price and quantity would decrease.c.The equilibrium price would increase, and the equilibrium quantitywould decrease.d.The equilibrium price would decrease, and the equilibrium quantitywould increase.ANS: APTS: 1DIF:2REF: 4-4NAT:AnalyticLOC:Supply and demandTOP:Equilibrium |Normal goodsMSC: Analytical
102.If macaroni and cheese is an inferior good, what would happen to the equilib-rium price and quantity of macaroni and cheese if consumers’ incomes rise?a.Both the equilibrium price and quantity would increase.b.Both the equilibrium price and quantity would decrease.c.The equilibrium price would increase, and the equilibrium quantitywould decrease.d.The equilibrium price would decrease, and the equilibrium quantitywould increase.ANS: BPTS: 1DIF:2REF: 4-4NAT:AnalyticLOC:Supply and demandTOP:Equilibrium |Inferior goodsMSC: Analytical103.If consumers often purchase muffins to eat while they drink their lattés at localcoffee shops, what would happen to the equilibrium price and quantity of lattésif the price of muffins rises?a.Both the equilibrium price and quantity would increase.b.Both the equilibrium price and quantity would decrease.c.The equilibrium price would increase, and the equilibrium quantitywould decrease.d.The equilibrium price would decrease, and the equilibrium quantitywould increase.ANS: BPTS: 1DIF:2REF: 4-4NAT:AnalyticLOC:Supply and demandTOP:Equilibrium |ComplementsMSC: Analytical
104.If consumers often purchase muffins to eat while they drink their lattés at localcoffee shops, what would happen to the equilibrium price and quantity of lattésif the price of muffins falls?a.Both the equilibrium price and quantity would increase.b.Both the equilibrium price and quantity would decrease.c.The equilibrium price would increase, and the equilibrium quantitywould decrease.d.The equilibrium price would decrease, and the equilibrium quantitywould increase.ANS: APTS: 1DIF:2REF: 4-4NAT:AnalyticLOC:Supply and demandTOP:Equilibrium |ComplementsMSC: Analytical105.If consumers view cappuccinos and lattés as substitutes, what would happento the equilibrium price and quantity of lattés if the price of cappuccinos rises?a.Both the equilibrium price and quantity would increase.b.Both the equilibrium price and quantity would decrease.c.The equilibrium price would increase, and the equilibrium quantitywould decrease.d.The equilibrium price would decrease, and the equilibrium quantitywould increase.ANS: APTS: 1DIF:2REF: 4-4NAT:AnalyticLOC:Supply and demandTOP:Equilibrium |SubstitutesMSC: Analytical