Question

1. A hotel in Mission Bay charges $275 per room in during the summer tourist season and $89 during the winter months. The number of rooms and operating costs for the hotel don't change, whether it is summer or winter. This increase in price indicates a. a rightward shift in the demand in the summer. b. a rightward shift in demand in the winter. c. a leftward shift in the supply curve in the summer. d. a leftward shift in demand in the winter. 2. If the demand for Hamilton Beach coffee makers increases, a. the quantity demanded will decrease. b. equilibrium price will increase and equilibrium quantity will decrease. c. equilibrium price will decrease and equilibrium quantity will increase. d. quantity supplied will increase. e. quantity supplied will decrease. 3. Scientists transform the milk market by creating a new hormone that is able to triple the amount of milk a cow can produce in a day. If most of the California dairies decide to start using this hormone, what will be the effect on the milk market? a. Supply shifts to the right, which causes equilibrium price of milk to increase and equilibrium quantity to increase. b. Supply shifts to the left and the equilibrium price and quantity of milk decreases. c. Supply increases, which causes the equilibrium price of milk to decrease and equilibrium quantity to increase. d. An increase in supply, which causes a higher equilibrium price and quantity of milk. e. A decrease in supply, lower equilibrium price, and higher equilibrium quantity.

Answer 1

Ans.1- (A)

Hotel charges a higher price in sunmer and lower price in winters. This higher price in summers could be indicated by a rightward shift of the demand curve.

Ans.2- (D)

If the demand for coffee makers increases then its proudcers will run out of stock. As a result they will have to increase their production and hence quantity supplied increase.

Ans.3- (C)

If amount of milk produced by a cow triples then supply curve shifts ro the right which increases equilibrium quantity and decreases equilibrium price.