2.3 quiz
If there is a surplus of a product, its price: a) is in equilibrium. b) will rise in the near future. c) is below the equilibrium level. d) is above the equilibrium level.
d
A decrease in supply, holding demand constant, will cause: a) Higher prices and a smaller quantity sold b) Lower prices and a smaller quantity sold c) Lower prices and a larger quantity sold d) Higher prices and a larger quantity sold
a
Given a downsloping demand curve and an upsloping supply curve for a product, an increase in the price of a substitute good (from the buyer's perspective) will: a) increase equilibrium price and quantity. b) increase equilibrium price and decrease equilibrium quantity. c)decrease equilibrium price and increase equilibrium quantity. d) decrease equilibrium price and quantity.
a
If the supply and demand curves for a product both decrease, then equilibrium: a) quantity must decline, but equilibrium price may rise, fall, or remain unchanged. b) quantity and equilibrium price must both decline. c) price must fall, but equilibrium quantity may rise, fall, or remain unchanged. d) quantity must fall and equilibrium price must rise.
a
Which of the above diagrams illustrate(s) the effect of a decline in the price of personal computers on the market for software? a) A only. b) B only. c) D only. d) A and D.
a
A market is in equilibrium: a) provided there is no surplus of the product. b) if the amount producers want to sell is equal to the amount consumers want to buy. c) at all prices above that shown by the intersection of the supply and demand curves. d) whenever the demand curve is downsloping and the supply curve is upsloping.
b
At the current price there is a shortage of a product. We would expect price to: a) increase, quantity demanded to increase, and quantity supplied to decrease. b) increase, quantity demanded to increase, and quantity supplied to increase. c) increase, quantity demanded to decrease, and quantity supplied to increase. d) decrease, quantity demanded to increase, and quantity supplied to decrease.
b
One can say with certainty that equilibrium price will decline when supply: a) decreases and demand increases. b) increases and demand decreases. c) and demand both increase. d) and demand both decrease.
b
Which of the above diagrams illustrate(s) the effect of a decline in the price of irrigation equipment on the market for corn? a) B and C. b) C only. c) D only. d) B only.
b
Which of the following statements is correct? a) If supply declines and demand remains constant, equilibrium price will fall. b) If supply increases and demand decreases, equilibrium price will fall. c) If demand decreases and supply increases, equilibrium price will rise. d) If demand increases and supply decreases, equilibrium price will fall.
b
Assume in a competitive market that price is initially above the equilibrium level. We can predict that price will: a) increase, quantity demanded will decrease, and quantity supplied will increase. b) decrease and quantity demanded and quantity supplied will both decrease. c) decrease, quantity demanded will increase, and quantity supplied will decrease. d) decrease, quantity demanded will decrease, and quantity supplied will increase.
c
At the equilibrium price: a) quantity supplied may exceed quantity demanded or vice versa. b) there are forces that cause price to fall. c)there are no pressures on price to either rise or fall. d) there are forces that cause price to rise.
c
Refer to the above diagram, in which S1 and D1 represent the original supply and demand curves and S2 and D2 the new curves. In this market the indicated shift in demand may have been caused by: a) an increase in incomes if the product is an inferior good. b) a decline in the price of a substitute good. c) a decline in the number of buyers in the market. d) an increase in incomes if the product is a normal good.
d
Refer to the above diagram. A price of $60 in this market will result in: a) equilibrium. b) a surplus of 100 units. c) a shortage of 50 units. d) a surplus of 50 units.
d
Refer to the above diagram. If this is a competitive market, price and quantity will move toward: a) $60 and 100, respectively. b) $60 and 200, respectively. c) $20 and 150, respectively. d) $40 and 150, respectively.
d
Which of the above diagrams illustrate(s) the effect of a decrease in incomes on the market for secondhand clothing? a) C only. b) A and C. c) A only. d) B only.
d
Which of the above diagrams illustrate(s) the effect of a governmental subsidy on the market for AIDS research? a) D only. b) A only. c) B only. d) C only.
d
Which of the following will cause a decrease in market equilibrium price and an increase in equilibrium quantity? a) an increase in demand. b) a decrease in supply. c) a decrease in demand. d) an increase in supply.
d
