Market Equilibrium Quiz

Using the data in the table above, the equilibrium quantity and equilibrium price for a cellular telephone is

60,000 and $50.

Computer chips are a normal good. Suppose the economy slips into a recession so that income falls. As a result, the demand for computer chips ________ so that the price of a computer chip ________.

Decreases; falls

Both the demand for and supply of cars changes in France. You observe that the quantity of cars does not change but the price rises. Thus, which of the following occurred?

Demand increased and supply decreased by an equal amount.

If good weather conditions result in a larger than normal crop of peaches, then the

Equilibrium price of peaches falls and the equilibrium quantity of peaches increases.

In an effort to protect endangered species from the effects of logging in America's national forests, the federal government passes a law prohibiting logging in most of the state of Washington. Which of the figures above best illustrates the effect of this new law?

Figure C

New technology for producing plywood is developed. Which of the figures above best illustrates this change?

Figure D

The number of logging firms increases. Which of the figures above best illustrates this change?

Figure D

Suppose that the equilibrium price and quantity of new houses both increase. Which of the following could be a cause of this change?

The demand for new houses increased and the supply did not change .

In the figure above, a price of $15 per dozen roses results in

a shortage.

In the figure above, a price of $35 per dozen roses results in

a surplus.

An increase in both the equilibrium price and quantity can be the result of

an increase in demand.

A surplus of cardboard boxes means that

at the current price of a cardboard box, the quantity demanded is less than the quantity supplied.

If the price of tangerines increases, the price of oranges also rises because

consumers consider the two goods substitutes and demand for oranges increases.

As a falling price eliminates a surplus in the jersey market,

consumers increase the quantity of jerseys they demand

Suppose improvements in technology cause the supply of natural gas to increase and at the same time the demand for natural gas increases. What are we sure of?

equilibrium quantity increases

Suppose that over the next few years the demand for dancing to country and western music decreases. Hence, at country and western dance clubs the equilibrium price of admission ________ and the equilibrium quantity of dancing ________. :

falls; decreases

If the demand curve for desktop computers shifts rightward and at the same time the supply curve shifts leftward, then

more information is needed to determine the effect on the equilibrium quantity.

Suppose the equilibrium quantity of movie tickets is 1,000. If the demand curve shifts ________, the equilibrium quantity of movie tickets will ________.

rightward; increase

If consumers buy a large number of plug-in electric cars, the equilibrium price of electricity will ________ and the equilibrium quantity of electricity will ________.

rise; increase

Fresh orange juice and frozen orange juice are substitutes in production. The price of fresh orange juice rises. As a result, the equilibrium price of FROZEN orange juice ________, and the equilibrium quantity ________.

rises; decreases

Suppose that the price of flour used to produce bagels increases. Hence the equilibrium price of a bagel ________, and the equilibrium quantity ________.

rises; decreases

Assume a competitive market is in equilibrium. There is an increase in demand, but no change in supply. As a result the equilibrium price ________, and the equilibrium quantity ________.

rises; increases

Suppose the equilibrium price of oranges is $2.00 per pound. If the actual price is above the equilibrium price, a

surplus exists and the price falls to restore equilibrium

If a market begins in equilibrium and then the demand curve shifts leftward, a

surplus is created, which is eliminated by a fall in price.

Suppose the current price of a pound of steak is $12 per pound and the equilibrium price is $9 per pound. In this case, there is a

surplus, so the price falls and quantity demanded increases.

For consumers, taco chips and salsa are complements. If the price of salsa rises, what is the effect on the equilibrium price and quantity of taco chips?

the equilibrium price of taco chips falls and the equilibrium quantity decreases

The table above shows the situation in the gasoline market in Tulsa, Oklahoma. If the price of a gallon of gasoline is $2.25, then

the gasoline market in Tulsa is in equilibrium.

When a surplus of rice occurs,

the price of rice falls.

Market equilibrium occurs when

the quantity demanded equals the quantity supplied.

If the price is below the equilibrium price,

there is a shortage