Question

Question 10 6.76 po In an analysis of the market for paint, an economist discovers the facts listed below. State whether each of these cha affect supply or demand and how it is affected. , There have recently been some important cost-saving inventions in the A. Decrease in quantity supplied H. technology for making paint. B. Demand shifts in C. Quantity demanded decreases D. Demand shifts out E. supply shifts out F. Supply shifts in G. Increase in quantity demanded H. Increase in quantity supplied I. Neither demand nor supply affected Paint is lasting longer, so that property owners need not repaint as m. c. , G. , Because of severe hailstorms, many people need to repaint now. Ci. C. . , The price of paint increases. . , The price of input costs decrease for suppliers The hailstorms damaged several factories that make paint, forcing them to close down for several months. ,

Answer 1

Answer : 10) a) The answer is option E.

When technology save cost of production then the production level increase at existing product price level. As a result, the market supply increase at existing price level which shift out the supply curve. Therefore, option E is correct.

b) The answer is option B.

As property owner has no need to repaint often hence at existing price level the demand for paint decrease. As a result, the demand curve shift in. Therefore, option B is correct.

c) The answer is option D.

As many people need to repaint now hence the demand for paint increase at existing price level. As a result, the demand curve shift out. Therefore, option D is correct.

d) The answer is option F.

Due to close down several paint factories the market supply decrease at existing price level. As a result, the supply curve shift in. Therefore, option F is correct.

e) The answer is option C.

There exists a negative relationship between price and quantity demanded. This means that if price rise then the quantity demanded decrease and vise versa. As here the price of paint increases hence the quantity demanded decreases. Therefore, option C is correct.

f) The answer is option E.

When input cost decrease then the production cost decrease. Hence producers increase their production level. As a result, the market supply increase at existing price level which shift the supply curve to outward. Therefore, option E is correct.