QUESTION 4In the market for breakfast cereal, the market is currently inequilibrium. Suddenly ther

QUESTION 4

In the market for breakfast cereal, the market is currently in equilibrium. Suddenly there is a storm that destroys the wheat that farmers had been growing for the cereal manufacturer.
What will happen to the cereal market after the storm?

a.

Demand will decrease.

b.

Supply will increase.

c.

Demand will increase.

d.

Supply will decrease.

QUESTION 5

In the market for desk lamps, which of the following will increase demand? Select all the answer options that apply.

a.

If the price of desks increases and desks are a complementary good

b.

An increase in income if the good is an inferior good

c.

If the price of floor lamps increases and floor lamps are a substitute good

d.

If the price of desks decreases and desks are a complementary good

e.

An increase in income if the good is a normal good

QUESTION 6

YouA????1re an entrepreneur and had a great idea to sell shoes that have springs installed in them to make walking easier. The development costs were so high that the shoes are priced 15 times higher than shoes without springs. As a result, many of the shoes have gone unsold.
What would be a possible event that could eliminate or reduce the disequilibrium in the market for shoes?

a.

There is a decrease in the price of rubber A????1 an input in the production of shoes

b.

A study reveals that shoes with a spring can increase the chance of a broken leg

c.

There is an increase in income and A????1spring shoesA????1 are a normal good

d.

There is an increase in income and A????1spring shoesA????1 are an inferior good