Saddle shoes are not popular right now, so very few are being produced. If saddle shoes become popular, then how will this affect the market for saddle shoes?

a.The supply curve for saddle shoes will shift right, resulting in a shortage at the current price. Price will increase, which will decrease quantity demanded and increase quantity supplied. The new market equilibrium will be at a higher price and higher quantity.

b.The supply curve for saddle shoes will shift right, resulting in a a surplus at the current price. Price will decrease, which will increase quantity demanded and decrease quantity supplied. The new market equilibrium will be at a lower price and higher quantity.

c.The demand curve for saddle shoes will shift right,resulting in a shortage at the current price. Price will increase, which will decrease quantity demanded and increase quantity supplied. The new market equilibrium will be at a higher price and higher quantity.

d.The demand curve for saddle shoes will shift right, resulting in a surplus at the current price. Price will decrease, which will increase quantity demanded and decrease quantity supplied. The new market equilibrium will be at a lower price and higher quantity.

The market for diamond rings is closely linked to the market for high-quality diamonds. If a large quantity of high- quality diamonds enters the market, then the

a.supply curve for diamond rings will shift right, resulting in a shortage at the current price. Price will increase, which will decrease quantity demanded and increase quantity supplied. The new market equilibrium will be at a higher price and higher quantity.

b.supply curve for diamond rings will shift right, resulting in a surplus at the current price. Price will decrease, which will increase quantity demanded and decrease quantity supplied. The new market equilibrium will be at a lower price and higher quantity.

c.demand curve for diamond rings will shift right, resulting in a shortage at the current price. Price will increase, which will decrease quantity demanded and increase quantity supplied. The new market equilibrium will be at a higher price and higher quantity.

d.demand curve for diamond rings will shift right, which will create a surplus at the current price. Price will decrease, which will increase quantity demanded and decrease quantity supplied. The new market equilibrium will be at a lower price and higher quantity.

1.Consider the market for 2-packs of light bulbs below.

i.Refer to the Figure above. What are the values of the equilibrium price and quantity?

ANSWER:

ii.Refer to the Figure above. At a price of $3, is there a shortage or surplus, and how large is the shortage/surplus?

ANSWER:

iii.Refer to the Figure above. At a price of $6, is there a shortage or surplus, and how large is the shortage/surplus?

ANSWER:

iv.Refer to the Figure above. Suppose there is an improvement in technology in this market and the price of lamps, a complementary good, increases. What changes do you predict in the equilibrium price and q