Practive #3

Supple there are a series of forest fires which affect the lumber industry. The wooden furniture market would experience: a. an increase in price and an increase in quantity b. an increase in price and decrease in quantity c. a decrease in price and an increase in quantity d. a decrease in price and an intermediate change in quantity

B

How would a decrease in the price of the feed grains used to feed cattle affect the market for beef? a. the demand for beef would increase, increasing beef prices b. the demand for beef would decrease, decreasing beef prices c. the supply of beef would increase, decreasing beef prices d. the supple of beef would decrease, increasing beef prices

C

Ceteris paribus, if consumer tastes change so that more people are eating broccoli, then what will happen to the market equilibrium for cabbage, a substitute good for broccoli? a. prices will increase, the quantity will increase b. price and quantity will stay the same c. price will decrease, and quantity will increase d. price will decrease, and quantity will decrease

D

In the market for smartphones and Verizon data plans, the two goods are complements. If the price of data plans rise, what response do you expect in the market for smartphones? a. prices will increase, the quantity will increase b. price and quantity will stay the same c. price will decrease, and quantity will increase d. price will decrease, and quantity will decrease

D

T/F: Quantity supplies will exceed quantity demanded if the price is above its equilibrium level

True

If the quantity demanded of milk is 55,000 and the quantity supplied of milk is 80,000 then, A. there is an excess supply of 25,000 units of milk B. the price of milk will tend to rise to clear the market C. consumers get the milk they want so market equilibrium exists D. there is an excess demand of 25,000 units of milk E. this is the intersection of market supply and demand curves

A

When prices are allowed to adjust freely, if the quantity demanded of a good is less than the quantity supplied of the good at the current price, then: A. Price will decrease until it reaches the equilibrium price b. the demand curve will shift to the left to create an equilibrium c. the supply will shift to the right to create an equilibrium d. there is a shortage of the good

A

T/F: If a gov't imposed price ceiling legally sets the price of beef below market equilibrium, there will be a surplus of beef

False