Question

Your pizza restaurant uses the finest food ingredients to make authentic brick-oven pizzas, and your mozarella cheese is imported from Italy. However, the new tariffs imposed by the US on food products from the European Union have raised the cost of the imported cheese. What impact does this have on your market for brick-oven pizzas?  

	A.	Demand curve shifts left
	B.	Supply curve shifts right
	C.	Demand curve shifts right
	D.	Supply curve shifts left

Over the past several years, medical research has demonstrated that consumption of food products that contain oats can help to reduce blood cholesterol levels. What impact would this new information have on the market for oat-based food products?

	A.	Supply shifts rightward
	B.	Supply shifts leftward
	C.	Demand shifts rightward
	D.	Demand shifts leftward

The market for fresh vegetables in Florence, KY, has a downward sloping demand curve and an upward sloping supply curve. Due to poor weather, the supply curves shifted leftward during the last growing season for the fresh vegetables. What impact did this event have on the equilibrium price and quantity in this market?

	A.	Price and quantity decline
	B.	Price and quantity increase
	C.	Price declines and quantity increases
	D.	Price increases and quantity declines

Answer 1

1)

Answer: (C)

Both of these are a substitute for each other. When there is a rise in the price of one substitute, the demand for another substitute good would witness rise. Hence, the demand for domestic pizza will shift to the right.

2)

Answer: ( C)

Demand will shift to the right since now its beneficial effects are known to people.

3)

Answer: ( D)

When there is a leftward shift in the supply curve, the price rises, and the equilibrium quantity declines.