AP Microeconomics Question of the Day

Practice AP Microeconomics with the production-style question-of-the-day selection for this public URL.

Question 1

Assuming a perfectly competitive market in equilibrium, which of the following would necessarily result in a lower equilibrium price for apples?

A new technology allows apples to be picked and processed at a lower cost
The wage paid to apple pickers increases AND consumer incomes shrink
A popular talk show host touts the health benefits of apples
The price of a substitute good increases

Explanation: A new technology for harvesting/processing apples would shift the supply curve outward, which would necessarily result in a lower market price for apples. Incorrect answers:

Talk show host increases demand => higher price
Price of substitute increases => higher demand => higher price
Wages increase => lower supply. Lower incomes => lower demand. Net result is lower quantity, ambiguous change in price.

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AP Microeconomics

AP Microeconomics Question of the Day

Practice AP Microeconomics with the production-style question-of-the-day selection for this public URL.

Question 1

Assuming a perfectly competitive market in equilibrium, which of the following would necessarily result in a lower equilibrium price for apples?

A new technology allows apples to be picked and processed at a lower cost
The wage paid to apple pickers increases AND consumer incomes shrink
A popular talk show host touts the health benefits of apples
The price of a substitute good increases

Explanation: A new technology for harvesting/processing apples would shift the supply curve outward, which would necessarily result in a lower market price for apples. Incorrect answers:

Talk show host increases demand => higher price
Price of substitute increases => higher demand => higher price
Wages increase => lower supply. Lower incomes => lower demand. Net result is lower quantity, ambiguous change in price.