ECO 101-Quiz 2

Which of the following is the correct way to describe equilibrium in a market?

At equilibrium, quantity demanded equals quantity supplied.

Let D= demand, S = supply, P = equilibrium price, and Q= equilibrium quantity. What happens in the market for walnuts if the Centers for Disease Control and Prevention announces that consuming a half cup of walnuts each week helps to lower levels of bad cholesterol?

D increases, S no change, P and Q increase.

Let D= demand, S = supply, P = equilibrium price, and Q= equilibrium quantity. What happens in the market for tropical hardwood trees if the governments restrict the amount of forest lands that can be logged?

S decreases, D no change, P increases, Q decreases.

Let D = demand, S = supply, P = equilibrium price, and Q = equilibrium quantity. What happens in the market for electric vehicles if the government offers incentives to manufacturers to produce more electric vehicles?

S increases, D no change, P decreases, Q increases

Which of the following is evidence of a surplus of bananas?

The price of bananas is lowered in order to increase sales.

Which of the following is evidence of a shortage of walnuts?

The quantity of walnuts demanded is greater than the quantity supplied.

Which of the following is generally not a private good?

a school

In 2004, hurricanes damaged a large portion of Florida's orange crop. As a result of this, many orange growers were not able to supply fruit to the market. If, following the hurricane, the price remained at its pre-hurricane level, we would expect to see

a shortage of oranges.

The term public, as used in this course, refers to:

government

The ability to influence the market price of a product is:

market power

At market equilibrium

quantity demanded equals quantity supplied.

If the quantity demanded for a product exceeds the quantity supplied, the market price will rise until

quantity demanded equals quantity supplied. The market price will then equal the equilibrium price.

Which of the following does not represent a market failure?

technology change

Select the phrase that correctly completes the following statement. "An increase in input prices caused a decrease in the supply of baseballs. As a result ________."

the price of baseballs increased and the quantity demanded of baseballs decreased