Micro Ch4

What happens to the equilibrium price and quantity when demand decreases and at the same time supply increases, but the demand shift is relatively larger than the supply shift?

Both the equilibrium price and quantity will fall.

What happens to the equilibrium price and quantity when demand increases and at the same time supply decreases, but the demand shift is larger than the supply shift?

Both the equilibrium price and the equilibrium quantity rise.

A new study discovers the health benefits of eating fish regularly. At the same time, some consumers decide to become vegetarians (no fish consumptions at all). What is the effect of these events on the equilibrium price and quantity in the fish market?

The change in both the equilibrium price and quantity is ambiguous.

What happens to the equilibrium price and quantity when demand decreases and at the same time supply increases, and the demand shift is relatively smaller than the supply shift?

The equilibrium price falls, and the equilibrium quantity rises.

A seller at a farmer's market wants $10 for a bag of 10 apples. You think his price is too high, so you counter with an offer of $6 for the bag. The seller then offers you a much smaller bag of five apples for $6. You bargain again, and the seller lets you buy the 10 apples for $8. This scenario is an example of:

a market in action

Graphically, shortages will always occur:

at prices below the equilibrium price (Qd>Qs)

An equilibrium price is:

determined by the intersection of the demand and supply curve

As a result of technological innovation, automated water pumps are being installed on the farms of Kenyan tomato farmers. As a result of the increased use of automated water pumps, the equilibrium price of tomatoes will:

fall; due to a rise in supply

The difference between a centralized economy and a market economy is that

governments make production decisions in a centralized economy, and individuals make production decisions in a market economy.

When there is a shortage of highly skilled workers in a particular region:

highly skilled workers can negotiate higher salaries

Graphically, the equilibrium quantity can be identified as the:

quantity corresponding to the intersection of demand and supply curves

A shortage occurs when:

quantity demanded exceeds quantity supplied.

An equilibrium price is a price where the

quantity supplied equals the quantity demanded

You eat M&Ms every day. When you go to the store to buy some, you find that M&Ms are more expensive than they were last month. Which of the following could explain why M&Ms are more expensive? a. Consumers are now purchasing fewer M&Ms compared to other types of chocolates. b. A new robot has been installed at the Mars chocolate company that reduces the time needed to produce M&Ms by half. c. The supply of cacao beans, used to produce chocolate, has fallen around the world. d. A new study finds that the benefits of eating chocolate are not as great as previously thought.

the supply of cacao beans, used to produce chocolate, has fallen around the world

You're shopping online, and you place an item in your virtual cart. Two days later, you return to the virtual cart to check out and find that the item is now more expensive. Assuming that the market is competitive, what could explain the price increase? a. New sellers are offering the same product. b. There is a surplus of the item. c. There is decreased demand for the item. d. There is a shortage of the item.

there is a shortage of the item

An equilibrium in a market occurs:

when the quantity supplied equals the quantity demanded

The United Kingdom plans to end the use of gas-powered and diesel-powered cars by the year 2040. At the same time, car manufacturers, such as General Motors and Nissan, are increasing the number of electric car models they produce. Based on this information, which of the following statements is/are correct? (i) If the supply of new electric cars is greater than the demand for new electric cars, then the price of electric cars will fall in the future. (ii) The demand for gasoline will fall in the future. (iii) The demand for electricity will rise in the future. (iv) The demand for diesel will rise in the future.

(i), (ii), and (iii)

Suppose that you have a pumpkin stall at a farmer's market, and the Halloween season arrives. You know that your customers will want to buy many pumpkins to decorate their houses and make pumpkin pies. Which of the following is a likely result of this scenario? a. You will be able to sell only the highest-quality pumpkins. b. You will take fewer pumpkins to the market to sell. c. You will wind up with many unsold pumpkins. d. You can charge a higher price per pumpkin.

you can charge a higher price per pumpkin