Friday, February 26, 2016

Demand & Supply Question #2 AP Micro exam 2000


Answer - (D)  "The release of three summer movies set records for movie attendance"

 (A) If the wages of farm workers and movie theater employee increase, the supply of popcorn and movies will decrease (shift to the left).

 (B) If there is a technological advance in corn production, the supply of popcorn will increase (shift to the right).

(C) If there is more competition, price will decrease because of the increased number of sellers.

(D) "The release of three summer movies set records for movie attendance" means that the quantity demand of movie attendance increases. Since popcorn and movie attendance are complements, the demand of popcorn increases. As a result, the price increases and the quantity increases of popcorn.

(E) New government regulations increase the cost of production and, therefore, cause supply to decrease.