The air in the balloon is heated up by leaving it in a cold place. Give two effects that this has on the air particles.
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Answer:
If the balloon is closed, then yes, both volume and pressure will increase when the gas inside is heated. Let's look at two simpler cases first.
If the gas were completely free to expand against ambient pressure (say, inside of a container sealed with a freely moving piston, with no friction), then the heated gas would expand until it created as much force per area (gas pressure) as the force per area acting on it (ambient pressure), so that the forces cancel out and the piston stops moving. Here, a temperature increase in the gas would translate solely to a volume increase.
If the gas were confined in a perfectly rigid box, then an increase in gas temperature would cause the molecules inside to bump harder against the inner surfaces, but to no avail, as the walls do not budge and the box stays exactly the same size. Here, a temperature increase in the gas would translate solely to a pressure increase.
In a balloon, the gas is free to expand, but not completely free. In other words, it's a situation somewhere between the two described above. The balloon skin is an elastic which pulls itself, creating a force vector pointing towards the interior of the balloon, and the more the skin is stretched, the stronger the force becomes. Now the gas inside the balloon has to create enough pressure to compensate for both the ambient pressure, and the elastic force trying to pull the balloon skin inwards. This means that after heating, the gas inside a balloon will expand since the balloon is not perfectly rigid, but the equilibrium pressure of the gas inside the balloon will be higher than before because the balloon is pressing against a more tightly stretched balloon.
This should be provable experimentally without much difficulty. Take a rubber balloon, preferably one with as thin of a membrane as you can get, and open its mouth to the atmosphere. Then, clamp it shut without blowing any air inside (in reality, you might have to blow some air in to unstick the rubber walls, but then let all the excess air out). The air inside will have a pressure exactly equal to ambient pressure, because the elastic is not being stretched. Now cover the balloon completely in warm water for a few minutes, and it should inflate slightly. Finally, remove the balloon from the water and quickly perforate it with a sharp object. You might be able to hear a small pop, and feel a rush of air. Both are an indication that pressure inside the heated balloon was higher than ambient pressure.