Micro: Market Equilibrium Quiz

Which of the following statements is correct? - If demand increases and supply decreases, equilibrium price will fall. - If supply increases and demand decreases, equilibrium price will fall. - If demand decreases and supply increases, equilibrium price will rise. - If supply declines and demand remains constant, equilibrium price will fall.

If supply increases and demand decreases, equilibrium price will fall.

A surplus of a product will arise when price is: - above equilibrium with the result that quantity demanded exceeds quantity supplied - above equilibrium with the result that quantity supplied exceeds quantity demanded - below equilibrium with the result that quantity demanded exceeds quantity supplied - below equilibrium with the result that quantity supplied exceeds quantity demanded

above equilibrium with the result that quantity supplied exceeds quantity demanded

Which of the following will cause a decrease in a market equilibrium price and an increase in equilibrium quantity? - an increase in supply - an increase in demand - a decrease in supply - a decrease in demand

an increase in supply

An increase in the price of a product that is a complement to X will: - decrease supply, decrease price, and decrease quantity - decrease demand, decrease price, and decrease quantity - increase demand, increase price, and increase quantity - increase demand, increase price, and decrease quantity

decrease demand, decrease price, and decrease quantity

A reduction in the number of firms producing X will: - increase demand, increase price, and increase quantity - increase supply, decrease price, and increase quantity - decrease supply, increase price, and decrease quantity - decrease supply, decrease price, and increase quantity

decrease supply, increase price, and decrease quantity

A market is in equilibrium: - provided there is no surplus of the product - at all prices above that shown by the intersection of the supply and demand curves - if the quantity of goods producers want to sell equal the quantity of goods consumers want to buy - whenever the demand curve downward sloping and the supply curve is upward sloping

if the quantity of goods producers want to sell equal the quantity of goods consumers want to buy

Assuming conventional supply and demand curves, changes in the determinants of supply and demand will: - in all likelihood after both equilibrium price and quantity - alter equilibrium quantity, but not equilibrium price - alter equilibrium price, but not equilibrium quantity - have no effect on equilibrium price or quantity

in all likelihood alter both equilibrium price and quantity

Suppose in each of four successive years producers sell more of their product and at lower prices. This could be explained: - by small annual increases in supply accompanied by large annual increases in demand - in terms of a stable supply and increasing demand - in terms of a stable demand and increasing supply - as an exception to the law of supply

in terms of a stable demand and increasing supply

An improvement in the technology used to produce X will: - decrease supply, increase price, and decrease quantity - decrease supply, increase price, and increase quantity - increase supply, decrease price, and increase quantity - decrease demand, decrease price, and decrease quantity

increase supply, decrease price, and increase quantity

If the demand and supply curves for product X are stable, a government-mandated increase in the price of X will: - increase the supply of X and decrease the demand for X - increase the demand for X and decrease the supply of X - increase the quantity supplied and decrease the quantity demanded of X - decrease the quantity supplied of X and increase the quantity demanded of X

increase the quantity supplied and decrease the quantity demanded of X

At the current price there is a market shortage. We would expect price to: -increase, quantity demanded to increase, and quantity supplied to decrease - increase, quantity demanded to decrease, and quantity supplied to increase - increase, quantity demanded to increase, and quantity supplied to increase - decrease, quantity demanded to increase, and quantity supplied to decrease

increase, quantity demanded to decrease, and quantity supplied to increase.

If a good is produced in surplus, its price: - is below the equilibrium level - is above the equilibrium level - will rise in the near future - is in equilibrium

is above the equilibrium level

The equilibrium price and quantity in a market results in allocative efficiency because: - all consumers who want the good are satisfied - marginal benefit and marginal cost are equal at the equilibrium quantity - equilibrium insures an equitable distribution of output - the excess of goods produced at equilibrium guarantees that all will have enough

marginal benefit and marginal cost are equal at the equilibrium quantity

If the supply and demand curves for a product both decrease, then equilibrium: - quantity must fall and equilibrium price must rise - price must fall, but equilibrium quantity may either rise, fall, or remain unchanged - quantity must decline, but equilibrium price may either rise, fall, or remain unchanged - quantity and equilibrium price must both decline

quantity must decline, but equilibrium price may either rise, fall, or remain unchanged

At the equilibrium price: - quantity supplied may exceed quantity demanded or vice versa - there are no forces to induce a price increase or decrease - there are forces that cause price to rise - there are forces that cause price to fall

there are no forces to induce a price increase or decrease