Market Equilibrium and Product Price

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

70,000 and $6.

The above figure shows the market for pizza. The market is in equilibrium when new pizza firms enter the market. What point represents the most likely new price and quantity?

D

The above figure shows the market for pizza. The market is in equilibrium. Pizza and tacos are substitutes for consumers. The price of tacos falls. What point represents the most likely new price and quantity?

E

A construction boom occurs and many of the new buildings need plywood for their framing. Which of the figures above best illustrates this change?

Figure A

Which figure above shows the effect if research is published claiming that eating pizza is healthy?

Figure A

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

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.

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.

Which of the following is the best explanation for why the price of gasoline increases during the summer months?

There is increased driving by families going on vacation.

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

A surplus of cardboard boxes means that

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

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 both supply and demand decrease by the same amount, the equilibrium price

does not change

Candy makers accurately anticipate the increase in demand for candy for Halloween so that the supply of candy and demand for candy increase the same amount. As a result, the price of candy ________ and the quantity of candy ________.

does not change, increases

If the demand and supply both increase equally, then the equilibrium price ________ and the equilibrium quantity ________.

does not change; increases

Because of a sharp increase in the price of gasoline, the demand for Sports Utility vehicles (SUVs) has decreased. So, the high price of gasoline leads to a

downward shift of the demand curve of SUVs and no shift in the supply curve of SUVs or leftward shift of the demand curve for SUVs and no shift in the supply curve of SUVs.

An increase in demand and a decrease in supply cause which of the following?

equilibrium price rises

The graph illustrates the market for computers. If the number of buyers of computers increases and technology advances, you predict that the

equilibrium quantity of computers will increase

The technology associated with manufacturing computers has advanced enormously. This change has led to the price of a computer ________ and the quantity ________.

falling; increasing

Bagels and cream cheese are complementary goods. Suppose that the price for flour, which is used to produce bagels, increases. The equilibrium price of cream cheese ________ and the equilibrium quantity of cream cheese ________.

falls; decreases

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

The demand for cat food decreases while the supply increases. The equilibrium price of cat food ________, and the equilibrium quantity ________.

falls; perhaps changes but we can't say if it increases, decreases, or stays the same

Which of the following is correct? i. A surplus puts downward pressure on the price of a good ii. A shortage puts upward pressure on the price of a good iii. There is no surplus or shortage at equilibrium

i, ii, and iii

Market equilibrium i. can never occur because there are always people who want a good but cannot afford it ii. occurs at the intersection of the supply and demand curves iii. is the point where the price equals quantity

ii only

Suppose a medical study reveals new benefits to consuming beef and at the same time a bumper corn crop reduces the cost of feeding steers. The equilibrium quantity of beef will

increase

If both producers and consumers believe that a product's price will rise in the future, then at the present, demand ________ and supply ________.

increases; decreases

If there is a surplus of a good, the quantity demanded is ________ the quantity supplied and the price will ________.

less than; fall

The graph illustrates the market for British pounds, the currency of the United Kingdom. As the number of buyers of pounds increases and the number of sellers of pounds increases, the equilibrium price of a pound

might rise, fall, or remain the same depending on whether the effect on buyers is larger than, less than, or the same as the effect on sellers

If both the supply and demand curves shift simultaneously, we can always predict what will happen to

not A

Kiwis and strawberries are substitutes for consumers. An increase in the price of a kiwi coupled with an increase in the number of strawberry growers ________ the equilibrium price of a pound of strawberries and ________ the equilibrium quantity of strawberries.

not A

Suppose that the price of bread rises. This rise could be the result of

not A

The above figure shows the market for pizza. The market is in equilibrium when people's incomes decrease. If pizza is a normal good, then which point represents the most likely new price and quantity?

not A

The above figure shows the market for pizza. The market is in equilibrium when the wages paid pizza workers increases. What point represents the most likely new price and quantity?

not A

The number of people looking to buy ceiling fan buyers increases, so there is an increase in the

not A

The demand for oranges increases while the supply decreases. The equilibrium price of oranges ________, and the equilibrium quantity ________.

not A, C

Suppose that the demand curve for desktop computers shifts rightward and at the same time the supply curve shifts leftward. Which of the following could have caused these shifts?

not C, A, B

A competitive market is in equilibrium. Then there is a decrease in demand and a decrease in supply. The equilibrium price ________, and the equilibrium quantity ________.

not falls; increases

When the demand for a good decreases, its equilibrium price ________ and equilibrium quantity ________.

not falls; increases

Which figure above shows the effect of a technological advance in the production of pizza?

not figure A

Which figure above shows the effect of an increase in the cost of the tomato sauce used to produce pizza?

not figure A, D

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

not producers increase the quantity of jerseys they supply.

When the demand curve shifts rightward and the market moves to a new equilibrium, then the

not supply increases

The graph illustrates the market for bottled water. If the producers of bottled water switch to using improved technology, then the

quantity demanded of bottled water increases

If the price of carrots is below the equilibrium price, the

quantity demanded of carrots exceeds the quantity supplied and a shortage exists.

When there is a shortage of parking spaces at your college, the

quantity of parking spaces demanded is greater than the supply and quantity of parking spaces supplied.

When there is a surplus of snowboards, the

quantity of snowboards supplied is greater than the quantity of snowboards demanded.

If there is a surplus of tacos, then the

quantity of tacos demanded is less than the quantity of tacos supplied.

The equilibrium price of a good occurs if the

quantity of the good demanded equals the quantity of the good supplied.

Suppose the equilibrium quantity of movie tickets is 1000. 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

If both producers and consumers believe that a product's price will rise in the future, then at the present, the equilibrium price

rises

If a freeze destroys oranges before they are harvested, the equilibrium price of an orange ________ 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

Using the data in the table above, if the price of a stapler is $8, then there is a ________ of staplers and the quantity of staplers demanded ________ the quantity of staplers supplied.

surplus; is less than

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

the equilibrium price definitely rises

The table above shows the situation in the gasoline market in Tulsa, Oklahoma. If the price of a gallon of gasoline is $3.65, then

the gasoline market in Tulsa is in equilibrium.

The above figure shows the market for game day t-shirts. If the price of t-shirts is $10, then

the market 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

The above figure shows the market for game day t-shirts. If the price of t-shirts is $8, then

the quantity demanded is greater than quantity supplied or there is a shortage and the price of t-shirts will rise

The initial equilibrium price in the market for Web pages is $200 per page and 1000 Web pages are created in a month. Many new Web design firms now enter the market. As a result,

the supply of Web pages increases and the price falls.

If the price is below the equilibrium price,

there is a shortage.

When personal computers were first produced, the price was very high. As time passed, the price of personal computers fell because

there were technological advances in the production of personal computers

The graph illustrates the market for British pounds, the currency of the United Kingdom. As the number of buyers of pounds decreases and the number of sellers of pounds increases, the equilibrium price of a pound

will fall