Matthew bakes apple pies that he sells at the local farmers market. If the price
ID: 1235846 • Letter: M
Question
Matthew bakes apple pies that he sells at the local farmers market. If the price of apples increases, then:Answer
The supply curve for Matthew's pies will increase.
The supply curve for Matthew's pies will decrease.
The demand curve for Matthew's pies will increase.
The demand curve for Matthew's pies will decrease.
1 points
Question 10
If the demand for a product increases, then we would expect equilibrium price:
Answer
To increase and equilibrium quantity to decrease.
To decrease and equilibrium quantity to increase.
And equilibrium quantity both to increase.
And equilibrium quantity book to decrease.
Explanation / Answer
1.
Correct option: The supply curve for Matthew's pies will decrease.
Reason: Since apples are used as an input to make apple pies, a rise in the price of apples will increase the input cost to Matthew, who find it costly to produce pies and would thus reduce its supply of pies.
2.
Correct option: And equilibrium quantity both to increase.
Reason: A rightward shift in the demand curve will lead to a rise in both price and quantity, keeping supply curve fixed.