Question

Si D2 D1 Quantity 13. The figure above represents the market for candy. People become more concerned that eating candy causes them to gain weight, which they do not like. As a result, the a. demand curve will not shift, and the supply curve shifts from $1 to S2 b. demand curve shifts from D1 to D2and the supply curve shifts from S1 to S c demand curve shifts from D2 to D1 and the supply curve shifts from $2 to S1. d. demand curve shifts from D2 to D1 and the supply curve will not shift. 14. The above figure represents the market for oil. Because of the development of a new deep sea drilling technology the demand curve shifts from D1 to D2 and the supply curve shifts from S1 to S2 b. a. demand curve shifts from D1 to D2 and the supply curve will not shift c. demand curve will not shift, and the supply curve shifts from S1 to S2. d. demand curve will not shift, and the supply curve shifts from S2 to S1. 15. The above figure represents the market for oil. When terrorists blow up a major refinery the a. demand curve for oil will not shift, and the supply curve for oil shifts from S2 to S1 b. demand curve for oil shifts from D1 to D2 and the supply curve for oil will not shift c. demand curve for oil shifts from D1 to D2 and the supply curve for oil shifts from S2 to S1 d. demand curve for oil will not shift, and the supply curve for oil shifts from S1 to S2. 16. The above figure represents the market for bicycles. When there is a physical fitness craze the a. demand curve for bicycles shifts from D1 to D2. b. demand curve for bicycles shifts from D2 to D1 c. supply curve of bicycles shifts from S1 to S2 d. demand curve and the supply curve of bicycles do not shift.

Answer 1

13). If the people believe that eating candy increases the weight, this decreases the demand for the candy and the demand curve would shift to the left from D 2 to D 1. The supply curve will not be affected in this case

Ans: d). The demand curve shifts from D 2 to D 1 and the supply curve will not shift.

14). The invention of the deep sea drilling machine would decrease the cost of the production and this would allow the firm to produce more. The supply will increase and the supply curve will shift to the right.

Ans: c). The demand curve will not shift and the supply curve shifts from S 1 to S 2.

15). This will negatively affect the supply of the oil , so here the supply will decrease and the supply curve will shift to the left from S 2 to S 1.

Ans: a). The demand curve will not shift and the supply curve shifts from S 2 to S1.

16). If there is craze for the physical fitness the people demand more cycle and this is the increase in the demand and the demand curve would shift to the right.

Ans: a). The demand curve for the bicycles shift from D 1 to D 2.

17). If the price is below the equilibrium there is the excess demand , that is people demand more goods and services at lower prices and the producers are not be willing to supply much at lower prices so there is a shortage for the goods.

Ans: b). Shortage.

18). The equilibrium is where the demand and supply were equal, and the equilibrium in the given figure is $6.

Ans: $6.

19). The finite nature of the economy resource base will prevail indefinitely, this is because there is wants and the resources are limited. So the problem of scarcity will prevail in every market.

Ans: b). Arises out of people's insatiable appetite for goods.

20). The positive statement deals with the question of 'what is' and the normative statement deals with the question of 'what ought to be'. Here both the statements are positive.