In: Economics
40. Assume there is a decrease in demand (only). Which of the following is correct?
Group of answer choices
The equilibrium price will decrease, and the equilibrium quantity will increase.
The equilibrium price will increase, and the equilibrium quantity will decrease.
The equilibrium price will decrease, and the equilibrium quantity will decrease.
The equilibrium price will increase, and the equilibrium quantity will increase.
41. Which of the following will cause a decrease in the supply for good Z (a normal good)?
Group of answer choices
an increase in productivity
an increase in the price of a substitute in production
an increase in the number of firms
an expectation by firms of a lower price
42. Assume there is an decrease in supply (only). Which of the following is correct?
Group of answer choices
The equilibrium price will increase, and the equilibrium quantity will decrease.
The equilibrium price will decrease, and the equilibrium quantity will increase.
The equilibrium price will increase, and the equilibrium quantity will increase.
The equilibrium price will decrease, and the equilibrium quantity will decrease.
41.
From the question when there is decrease in supply, it will be done by other than the price factors
the factors can be
Productivity
Taxes and subsidies
Presence of technology in the market
Expectation by the suppliers etc
So when there is decrease in supply it means the supply curve shift will shift leftwards
When there is increase in the productivity the supply will increase
When the expectation of firms are low then supply will be increase today
The number of firms will not affect the supply
But if there will be more production of substitute then there will be decrease in supply of good z
So the answer here is option B
42.