Wool and cotton can both be used to manufacture clothing in the garment industry. Suppose that bad weather destroys cotton crops at the same time that the price of wool increases signicantly. What is likely to be the impact on the market for cotton? 0 a decrease in both the equilibrium price and the quantity sold 0 an increase in the equilibrium price and a decrease in the quantity sold 0 an increase in both the equilibrium price and the quantity sold 0 an uncertain effect on the equilibrium quantity but an increase in the equilibrium price Question 7 (1 point} 'E Iii) Listen p ' Which of the following would reduce the supply of computers? 0 higher wage rates for the workers that assemble the computers 0 a reduction in the price of computers 0 a technological improvement that lowers the cost of producing the computers 0 a reduction in the price of computer chips used to produce the computers Paper mill wage costs decrease by 18 percent over a year. What is the likely economic effect on the market for paper? 0 There is a decrease in the cost of producing paper, which shis the supply curve of paper to the left, thereby decreasing the price of paper. 0 There is a decrease in the cost of producing paper, which shis the supply curve of paper to the right, thereby decreasing the price of paper. 0 The decrease in wage costs will shift the demand curve for paper to the right, thereby decreasing the cost of paper. 0 There is an increase in the cost of producing paper, which shifts the supply curve of paper to the right, thereby decreasing the price of paper. Question 16 (1 point) Listen Ceteris paribus, if doctors were to discover that eating spinach reduces a person's level of bad cholesterol (a major cause of heart disease); the demand curve for spinach will shift to the left. True O False Question 17 (1 point) 1 Listen Which of the following statements best describes equilibrium in a market? O At equilibrium, quantity demanded equals quantity supplied. O Equilibrium is a tendency for price to change, a state of perpetual motion. O At equilibrium, there will always be a surplus for consumers to purchase. O At equilibrium, market forces NO longer apply.Question 19 (1 point) ) Listen What term accurately describes supply when the quantity supplied is very responsive to changes in price? Oelastic independent inelastic unit elastic Question 20 (1 point) () Listen Rafael's Barber Shop knows that a 5 percent decrease in the price of its haircuts results in a 15 percent increase in the number of haircuts purchased. What is the elasticity of demand facing Rafael's Barber Shop? 0.05 O 0.10 0.15 3.0What is the direction of a perfectly inelastic supply curve? O vertical upward sloping to the right O horizontal O downward sloping to the left