Econ 201 problem set 3

A surplus exists

when the quantity supplied exceeds the quantity demanded

When supply falls, what happens to quantity demanded in equilibrium ?

Falls

If the price of basketballs goes up from $7.99 to $14.99, what can be expected from suppliers of basketballs as a result?

There will be an increase in quantity supplied

The price that results when quantity demanded equals quantity supplied is most correctly called the:

equilibrium price

Jon is on eBay, bidding for a first edition of the influential Frank Miller graphic novel Batman: The Dark Knight Returns. In this market, who is Jon competing with?

the other bidders

Stone and brick are substitutes in home construction. Suppose the price of stone increases due to new regulations for the stone quarrying industry. Describe the impact this will have on the market for bricks. a. What will happen with supply and demand in the market for bricks ? b. Equilibrium price of bricks c. Equilibrium quantity of bricks

-Demand for bricks will increase -increases -increases

What's the best way to think about the rise in oil prices in the last 10 years, as china and India have become richer. Was it a rise in demand, fall in demand, a rise in supply, or a fall in supply? The price rose due to a

Rise in demand

Suppose the price in a market is above the equilibrium price. This situation will create

A surplus

Many clothing stores often have clearance sales at the end of each season. Which of the following provides the best explanation for this ?

At the end of the season, the quantity demanded on some items is less than the quantity supplied.

When the crime rate falls in the area around a factory, what probably happens to wages at the factory?

Wages fall due to an increase in labor supply