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21. Prices of commercial airline tickets (assume that this is a normal good) have fallen in recent

months. Over this same period, the price of jet fuel has risen and consumer incomes have fallen.

Which of the following best explains the falling prices of airline tickets?

A) The supply curve for airline tickets has shifted to the left while the demand curve for airline

tickets has shifted to the right.

B) The demand curve for airline tickets has shifted to the left more than the supply curve has

shifted to the left.

C) The demand curve and the supply curve for airline tickets have both shifted to the right.

D) The supply curve for airline tickets has shifted to the left more than the demand curve has

shifted to the left.

22. In recent years the cost of producing wines in the U.S. has increased largely due to rising

rents for vineyards. At the same time, more and more Americans prefer wine over beer. Which

of the following best explains the effect of these events in the wine market?

A) The supply curve has shifted to the left and the demand curve has shifted to the right. As a

result there has been an increase in the equilibrium quantity and an uncertain effect on the

equilibrium price.

B) Both the supply and demand curves have shifted to the right. As a result, there has been an

increase in the equilibrium price and an uncertain effect on the equilibrium quantity.

C) Both the supply and demand curves have shifted to the right. As a result, there has been an

increase in both the equilibrium price and the equilibrium quantity.

D) The supply curve has shifted to the left and the demand curve has shifted to the right. As a

result, there has been an increase in the equilibrium price and an uncertain effect on the

equilibrium quantity.

23. A decrease in the demand for eggs due to changes in consumer tastes, accompanied by a

decrease in the supply of eggs as a result of an outbreak of Avian flu, will result in

A) a decrease in the equilibrium quantity of eggs and no change in the equilibrium price.

B) a decrease in the equilibrium price of eggs and no change in the equilibrium quantity.

C) a decrease in the equilibrium price of egg; the equilibrium quantity may increase or decrease.

D) a decrease in the equilibrium quantity of eggs; the equilibrium price may increase or decrease.

24. During the 1990s positive technological change in the production of chicken caused the price

of chicken to fall. Holding everything else constant, how would this affect the market for pork (a

substitute for chicken)?

A) The supply of pork would increase and the equilibrium price of pork would decrease.

B) The demand for pork would decrease and the equilibrium price of pork would decrease.

C) The demand for pork would increase because consumers could afford to buy more chicken

and pork.

D) The demand for pork would decrease and the equilibrium price of pork would increase.

Supply And Demand Practice Problems Worksheet With Answers - Instructor Miller - Des Moines Area Community College Page 5