ECS1501
Suggested solution by Xolile (0712362704,/0719998611)
Assessment :6
1. When supply shifts to the right and demand stay constant, the equilibrium price
decreases and the equilibrium quantity increases.(False)
2. Suppose that the wages of farm workers decrease at the same time that strawberries
experience a sudden burst of popularity. We conclude that the quantity will increase but
the price will decrease.(False)
3. If the demand for motor vehicles decreases due to a drop in consumer income, and if, at
the same time, increases in factor prices cause the supply of motor vehicles to decrease,
the price of motor vehicles will decrease. (False)
4. Suppose that the demand and supply of a good increase simultaneously. The effect on
the equilibrium price of the good will be ambiguous, but the equilibrium quantity will
decrease.(False)
5. When both supply and demand shift to the right equilibrium price always decreases.
(False)
6. When both supply and demand shift to the right equilibrium price always
decreases.(False)
7. When both supply and demand shift to the right equilibrium quantity always increases.
(True)
8. According to a leading commentator on the markets for laptops and tablets, the demand
for tablets has increased significantly over the past 5 years. But, over this same time
period, the price of a tablet has decreased sharply. A possible explanation for this is that
the supply curve of tablets must be horizontal.(False)
9. In a competitive market, supply and demand decrease simultaneously. The effect on
equilibrium quantity is an increase.(False)
10. When the supply of coffee decreases and the demand for coffee increases due to an
increase in the preference for coffee, the price of coffee will either increase or decrease.
(False)
11. When the supply of coffee decreases and the demand for coffee increases due to an
increase in the preference for coffee, the price of coffee will either increase or decrease.
(False)
, 13.Suppose that the wages of farm workers decrease at the same time that strawberries
experience a sudden burst of popularity. We conclude that both the price and the quantity will
decrease.(False)
14. When the supply of coffee decreases and the demand for coffee increases due to an
increase in the preference for coffee, the price of coffee will increase. (True)
15.When supply shifts right and demand shifts left, the equilibrium quantity always
increases.(False)
16.Lerato decided to start selling ginger beer on her street. The other kids in the neighbourhood
noticed that Lerato was making a lot of money selling ginger beer. These kids decided to open
their own ginger beer stands. When they opened their own ginger beer stands, the equilibrium
price decreased and the equilibrium quantity increased. (True)
17.Lerato decided to start selling ginger beer on her street. The other kids in the neighbourhood
noticed that Lerato was making a lot of money selling ginger beer. These kids decided to open
their own ginger beer stands. When they opened their own ginger beer stands, the equilibrium
price decreased and the equilibrium quantity decreased. (False)
18.The Board of Private Schools offers numerous educational subsidies through grants and low
-cost equipment to private schools. They also provide a lot of incentives to learners to attend
private schools. Because of this, we expect that the equilibrium price of attending a private
school will go up and the equilibrium quantity of students will go up.(False)
19.Since one of the actors in a popular television series has been spotted wearing pink
sunglasses, pink sunglasses is a must for every fashion conscious person. At the same time, a
technological innovation reduces the costs of producing pink sunglasses. As a result, the
equilibrium price of pink sunglasses will either increase, decrease, or stay the same, and the
equilibrium quantity could also either increase, decrease, or stay the same. (False)
20.Suppose that the demand and supply of a good increase simultaneously. The effect on the
equilibrium price of the good will be ambiguous, but the equilibrium quantity will increase.(True)
21.A technological advancement for Good A will shift the _________ curve of Good A to the
_________, leading to a ___________in the equilibrium price.
A, demand; left; decrease.
B, supply; left; increase.
C, demand; right; increase.
D, supply; right; decrease.
Suggested solution by Xolile (0712362704,/0719998611)
Assessment :6
1. When supply shifts to the right and demand stay constant, the equilibrium price
decreases and the equilibrium quantity increases.(False)
2. Suppose that the wages of farm workers decrease at the same time that strawberries
experience a sudden burst of popularity. We conclude that the quantity will increase but
the price will decrease.(False)
3. If the demand for motor vehicles decreases due to a drop in consumer income, and if, at
the same time, increases in factor prices cause the supply of motor vehicles to decrease,
the price of motor vehicles will decrease. (False)
4. Suppose that the demand and supply of a good increase simultaneously. The effect on
the equilibrium price of the good will be ambiguous, but the equilibrium quantity will
decrease.(False)
5. When both supply and demand shift to the right equilibrium price always decreases.
(False)
6. When both supply and demand shift to the right equilibrium price always
decreases.(False)
7. When both supply and demand shift to the right equilibrium quantity always increases.
(True)
8. According to a leading commentator on the markets for laptops and tablets, the demand
for tablets has increased significantly over the past 5 years. But, over this same time
period, the price of a tablet has decreased sharply. A possible explanation for this is that
the supply curve of tablets must be horizontal.(False)
9. In a competitive market, supply and demand decrease simultaneously. The effect on
equilibrium quantity is an increase.(False)
10. When the supply of coffee decreases and the demand for coffee increases due to an
increase in the preference for coffee, the price of coffee will either increase or decrease.
(False)
11. When the supply of coffee decreases and the demand for coffee increases due to an
increase in the preference for coffee, the price of coffee will either increase or decrease.
(False)
, 13.Suppose that the wages of farm workers decrease at the same time that strawberries
experience a sudden burst of popularity. We conclude that both the price and the quantity will
decrease.(False)
14. When the supply of coffee decreases and the demand for coffee increases due to an
increase in the preference for coffee, the price of coffee will increase. (True)
15.When supply shifts right and demand shifts left, the equilibrium quantity always
increases.(False)
16.Lerato decided to start selling ginger beer on her street. The other kids in the neighbourhood
noticed that Lerato was making a lot of money selling ginger beer. These kids decided to open
their own ginger beer stands. When they opened their own ginger beer stands, the equilibrium
price decreased and the equilibrium quantity increased. (True)
17.Lerato decided to start selling ginger beer on her street. The other kids in the neighbourhood
noticed that Lerato was making a lot of money selling ginger beer. These kids decided to open
their own ginger beer stands. When they opened their own ginger beer stands, the equilibrium
price decreased and the equilibrium quantity decreased. (False)
18.The Board of Private Schools offers numerous educational subsidies through grants and low
-cost equipment to private schools. They also provide a lot of incentives to learners to attend
private schools. Because of this, we expect that the equilibrium price of attending a private
school will go up and the equilibrium quantity of students will go up.(False)
19.Since one of the actors in a popular television series has been spotted wearing pink
sunglasses, pink sunglasses is a must for every fashion conscious person. At the same time, a
technological innovation reduces the costs of producing pink sunglasses. As a result, the
equilibrium price of pink sunglasses will either increase, decrease, or stay the same, and the
equilibrium quantity could also either increase, decrease, or stay the same. (False)
20.Suppose that the demand and supply of a good increase simultaneously. The effect on the
equilibrium price of the good will be ambiguous, but the equilibrium quantity will increase.(True)
21.A technological advancement for Good A will shift the _________ curve of Good A to the
_________, leading to a ___________in the equilibrium price.
A, demand; left; decrease.
B, supply; left; increase.
C, demand; right; increase.
D, supply; right; decrease.
