Chapter 4 practice quiz
increase equilibrium price and increase equilibrium quantity
A new highway that has an exit near your restaurant will tend to __________ for your food.
an increase in demand
A shift from D1 to D2 represents
a decrease in supply.
A shift from S1 to S2 represents
the price of the product will fall and the quantity will fall.
When the demand for a product falls (decreases) but the supply of the product remains unchanged,
a shortage.
When the market price is lower than the equilibrium price, there is
Price equilibrium will decrease and quantity equilibrium will increase.
Workers at Chrysler have voted in their union to take a large wage cut. What will be the immediate change in supply and demand for Chrysler vehicles?
decreasing quantity supplied and increasing quantity demanded.
Price ceilings have the effect of
at all prices
A decrease in demand means that quantity demanded falls
It will rise.
If the price of Diet Pepsi rises, what will be the immediate effect on the price of Diet Coke? (hint: first think about what curve will shift for Diet Coke. Draw out Diet Coke's supply and demand curve graph and then look at the new price.)
a decrease in quantity supplied
If we go from point J to point I, then we may conclude that there was
an increase in supply
If we go from point J to point K, then we may conclude that there was
there is a shortage
In the graph shown above, at a price of $3.00
remain at $.80.
If the equilibrium price of lettuce is $.80 per head and the government imposes a price floor of $.70 per head, the price of lettuce will
quantity demanded of a good is negatively related to its price.
According to the law of demand, the
the demand curve shifts to the right.
An increase in demand occurs when
quantity demanded is always equal to quantity supplied.
At equilibrium price,
shift the supply curve to the left.
Gold producers expect that the price of gold will go up in a few months. The immediate effect will be to
an increase in the quantity of mushrooms sold and an increase in their price.
If the demand for mushrooms increases while the supply remains unchanged, the immediate effect will be
a surplus of personal trainers
If the equilibrium price of an hour with a personal trainer is $45 and the market price is currently $55, then there is
lower, lower
Rent controls tend to __________ the supply of housing and the ________ the level of rents paid.
an increase the equilibrium price and decrease the equilibrium quantity.
The government has added an excise (sales) tax on candy. The immediate effect will be
a price floor.
The price of $10 in the graph above represents
The demand for computer software will decrease.
The price of computers has gone way up. What will be the immediate effect for computer software?
The law of supply will be triggered.
The price of steak is expected to go up next month. What statement will be true from the consumer's point of view?
change in people's tastes
The reasons below would cause a shift in the supply curve for corn EXCEPT for
Price equilibrium will decrease and quantity equilibrium will decrease.
The stock market has gone up substantially. What will be the immediate effect on inferior products?
market price is above equilibrium price
There is a surplus of quantity supplied over quantity demanded when
It decreases (falls). supplied when the price is lowered? What happens to quantity
What happens to quantity supplied when the price is lowered?
quantity supplied rises
When a price ceiling which had been set below equilibrium price is removed, what happens next?
the market is cleared.
When quantity supplied equals quantity demanded,
equilibrium quantity increases
When supply rises (increases) and demand stays the same,