Micro Practice Quiz Chapter 4

decrease in the supply of wine, increasing price.

An early frost in the vineyards of Napa Valley would cause a(n):

The equilibrium price increases; the change in the equilibrium quantity is uncertain

An increase in demand and a decrease in supply occur in a market. What happens to the equilibrium price and quantity?

temporary shortage at the old equilibrium price and a higher new equilibrium price and quantity.

An increase in demand causes a:

False

An increase in demand causes an increase in quantity supplied, which causes a decrease in price.

True

An increase in quantity demanded is a movement along a fixed demand curve caused by a shift in the supply curve.

False

An increase in quantity demanded is a shift in the entire demand curve.

The equilibrium price decreases; the change in the equilibrium quantity is uncertain.

An increase in supply and a decrease in demand occur in a market. What happens to the equilibrium price and quantity?

True

An increase in supply causes a temporary surplus at the old equilibrium price.

$3.

(Figure: Basic Supply and Demand) In the diagram, the market price is stable only at a price of:

The equilibrium price is $3, and the equilibrium quantity is 50 units.

(Figure: Basic Supply and Demand) In the diagram, which of the following statements is TRUE?

When the price is $2, there is a tendency for the price to rise in the future.

(Figure: Basic Supply and Demand) In the diagram, which of the following statements is TRUE?

The price will increase because of a shortage.

(Figure: Chocolate) If the price in the diagram is $5, what will happen?

$8

(Figure: Chocolate) What is the equilibrium price per pound in the diagram?

$480.

(Figure: Demand and Supply) Refer to the figure. At the equilibrium quantity, total surplus is:

Buyers are willing to pay $20 for the 16th unit of output and it costs sellers $60 to produce that unit.

(Figure: Demand and Supply) Refer to the figure. Which statement is TRUE?

S1 will shift to S3 and equilibrium price will decrease but equilibrium quantity will increase.

(Figure: Demand, Supply Shifts) In the figure, the initial demand curve is D1 and the initial supply curve is S1. If technological innovations lower the costs of production, what will happen?

D1 will shift to D2.

(Figure: Demand, Supply Shifts) In the figure, the initial demand curve is D1 and the initial supply curve is S1. If this depicts the equilibrium in the market for computer printers, what will happen when the price of computers increases?

S1 shifts to S2 and D1 shifts to D2.

(Figure: Demand, Supply Shifts) In the figure, the initial demand curve is D1 and the initial supply curve is S1. Resource prices in this market increase; at the same time, the consumer population declines as migration causes an outflow of population to other regions. What happens to the supply curve and/or demand curve?

S1 will shift to S2

(Figure: Demand, Supply Shifts) In the figure, the initial demand curve is D1 and the initial supply curve is S1. Suppose this depicts the market for corn. How does the market change when flooding in Iowa destroys a significant amount of the corn crop.

8.

(Figure: Equilibrium) Refer to the figure. The equilibrium price (in $) is:

16.

(Figure: Equilibrium) Refer to the figure. The equilibrium quantity (in units) is:

shortage of 50 units would exist, and price would rise.

(Table: Equilibrium Adjustment) Refer to the table. If the price in the free market is $2, then a:

surplus of 25 units would exist, and price would tend to fall.

(Table: Equilibrium Adjustment) Refer to the table. If the price in the free market is $8, then a:

$6.

(Table: Equilibrium Adjustment) Refer to the table. The equilibrium price is:

$16

(Table: Equilibrium Price, Quantity) Refer to the table. If the demand curve for the product shifted to the right such that 10 more units of the good are demanded at every price, what is the new equilibrium price?

shortage of 10 units.

(Table: Equilibrium Price, Quantity) Refer to the table. If the price in the market was $12, there would be a:

the combined actions of buyers and sellers.

A free market achieves an equilibrium price and quantity due to:

False

A decrease in demand for a good will lead to a decrease in the price of the good, but an increase in the quantity supplied.

False

A decrease in supply raises the price of a good, but it also decreases the quantity demanded, which lowers the price of a good. The net effect on price is ambiguous.

True

A decrease in the supply of milk will lead to a decrease in the QUANTITY DEMANDED of milk.

price and quantity demanded, which are negatively related.

A demand curve shows the relationship between:

False

A market shortage can be defined as a situation in which the quantity supplied in a market is greater than the quantity demanded, at the given price.

True

A market surplus can be defined as a situation in which the quantity demanded in a market is less than the quantity supplied, at the given price.

decrease in supply; rise; fall

A(n) ______ causes the equilibrium price to ______ and equilibrium quantity to ______.

an increase in orange prices and a decrease in orange sales.

After a hurricane in Florida destroys half of the orange crop, economists predict:

demand increased, which caused an increase in quantity supplied.

In the figure, the demand curve shifted from D0 to D1. To describe this movement, we would say that:

$8 and the equilibrium quantity rises to 140.

Refer to the figure. When the demand curve shifts from D0 to D1, the equilibrium price rises to:

reducing the supply of oil

The Arab Oil Embargo of 1973, the Iranian Revolution of 1979, and the Gulf War of 1991 all affected oil prices by: