4-31 If demand for zort were to increase,
A. Incorrect. Demand does not affect supply.
B. Incorrect. Demand does not affect supply.
D. Incorrect. Increasing demand would raise the price of zort.
E. Incorrect. The quantity of zort purchased would increase if demand increased.
4-32 The price of wheat flour goes up. Home bakers and bakeries must both pay the higher price. What will happen?
A. Incorrect. The demand for flour is not affected by its price (quantity demanded may be).
B. Incorrect. The supply of flour is not affected by its price (quantity supplied may be).
C. Correct.The supply of cakes will fall, since it is affect by the cost of making cake, and the price of flour affects that cost.
D. Incorrect. The supply of flour is not affected by its price (quantity supplied may be).
E. This could be right if you thought about it a lot. If bakery cakes are substitutes for home made cakes, there may actually be an increase in demand for them (while the supply of them falls). It's not as clear as C, but it is possible.
4-33 Which of the following is most likely to result in a lower price of blirks?
A. Incorrect. If the price of a complement is falling, demand for blirks will rise, tending to make the price rise as well.
B. Correct. When a substitute's price falls, the demand for blirks will fall, reducing the price.
C. Incorrect. This would tend to increase demand, raising price.
D. Incorrect. This would tend to increase demand, raising price.
E. Incorrect. This would tend to increase demand, raising price.
4-34 Which of the following is most likely to result in a lower quantity of riftons being purchased?
A. Correct. If nothing else is changing, the law of demand would say that a higher price will go along with a lower quantity demanded.
B. Incorrect. This would tend to increase demand, raising quantity purchased.
C. Incorrect. This would tend to increase supply, raising the quantity purchased.
D. Incorrect. This would tend to increase demand, raising quantity purchased.
E. Incorrect. This would tend to increase demand, raising quantity purchased.
4-35 Which of the following is most likely to result in a lower quantity of riftons being purchased?
A. Incorrect. This would tend to increase supply, raising the quantity purchased.
B. Correct. It the price of a substitute falls, demand will fall for riftons, reducing quantity sold.
C. Incorrect. This reduction in the price of a complement would tend to increase demand, raising quantity purchased
D. Incorrect. This would tend to increase demand, raising quantity purchased
E. Incorrect. This would tend to increase demand, raising quantity purchased
4-36 Flirflits are built using robots. An improvement in robot technology is most likely to
A. Incorrect. The technology will probably increase supply, lowering price.
B. Correct. Lower production costs increase the supply of flirflits.
C. Incorrect. Changing costs or supply will not affect the demand for flirflits.
D. Incorrect. Changing costs or supply will not affect the demand for flirflits.
E. Incorrect. The technology will probably increase supply, increasing quantity.
4-37 Crimnots are built using steel. An increase in the price of steel is most likely to
A. Correct. Higher production costs decrease the supply, raising price.
B. Incorrect. Higher production costs decrease the supply.
C. Incorrect. Changing costs or supply will not affect the demand for crimnots.
D. Incorrect. Changing costs or supply will not affect the demand for crimnots.
E. Incorrect. The higher costs will probably decrease supply, decreasing quantity.
4-38 Suddenly, green fleeps become very popular. Which of the following would you not expect to occur?
A. Incorrect. The higher demand would increase the price.
B. Correct. The popularity of the complement would also tend to increase the demand for fleep dusters. This is a case where looking at the price of the complement alone is misleading.
C. Incorrect. The higher demand would cause the quantity of green fleeps purchased to increase.
D. Incorrect. Changes in demand will not change the supply of green fleeps.
E. Incorrect. The popularity of the complement would also tend to increase the demand for fleep accessories. This is a case where looking at the price of the complement alone is misleading.
4-39 The price of ingredients in snirkles falls at the same time as the income of snirkle buyers rises. What is most likely to happen?
A. Correct. Supply is increasing at the same time as demand is increasing.
B. Incorrect. Supply is increasing at the same time as demand is increasing. Quantity purchased will rise, but we can't tell about price.
C. Incorrect. Supply is increasing at the same time as demand is increasing. Quantity purchased will rise, but we can't tell about price.
D. Incorrect. Supply is increasing at the same time as demand is increasing. Quantity purchased will rise, but we can't tell about price.
E. Incorrect. Supply is increasing at the same time as demand is increasing. Quantity purchased will rise, but we can't tell about price.
4-40 .Fear of crime raises the demand for handguns. Which of the following will be most likely to happen?
A. Incorrect. With higher demand, the price of guns will rise and so will the quantity sold.
C. Incorrect. With higher demand, the price of guns will rise and so will the quantity sold.
D. Incorrect. With higher demand, the price of guns will rise and so will the quantity sold.
E. Incorrect. With higher demand, the price of guns will rise and so will the quantity sold.