ECO 101: Quiz 2

b. quantity demanded equals quantity supplied.

At market equilibrium a. demand equals supply. b. quantity demanded equals quantity supplied. c. surpluses are greater than shortages. d. shortages are greater than surpluses.

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

If the quantity demanded for a product exceeds the quantity supplied, the market price will rise until a. the quantity demanded equals the quantity supplied. The product will then no longer be scarce. b. quantity demanded equals quantity supplied. The equilibrium price will then be greater than the market price. c. only wealthy consumers will be able to afford the product. d. quantity demanded equals quantity supplied. The market price will then equal the equilibrium price.

c. A shortage of oranges.

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. A surplus of oranges. b. The quantity demanded equal to the quantity supplied. c. A shortage of oranges. d. An increase in the demand for oranges.

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

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? a. D increases, S no change, P and Q increase b. S increases, D no change, P decreases, Q increases c. D and S increase, P and Q decrease d. D no change, S increases, P decreases, Q decreases

b. 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 tropical hardwood trees if the governments restrict the amount of forest lands that can be logged? a. D decreases, S no change, P and Q decrease. b. S decreases, D no change, P increases, Q decreases. c. D and S decrease, P and Q increase. d. D no change, S decreases, P increases, Q increases.

a. 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 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? a. D increases, S no change, P and Q increase. b. S increases, D no change, P decreases, Q increases. c. D and S increase, P and Q decrease. d. D no change, S increases, P decreases, Q decreases.

a. 200

Refer to above Figure #1, at a price of $10, how many units will be sold? a. 200 b. 400 c. 600 d. 800

b. 500

Refer to above Figure #1, at a price of $25, how many units will be sold? a. 400 b. 500 c. 600 d. 800

d. the market is in equilibrium.

Refer to above Figure #1, if the price is $20 a. there is a surplus of 600 units. b. there is a shortage of 600 units. c. quantity demanded is zero. d. the market is in equilibrium.

a. there is a surplus of 300 units.

Refer to above Figure #1, if the price is $25 a. there is a surplus of 300 units. b. there is a shortage of 300 units. c. there is a surplus of 200 units. d. there is a shortage of 200 units.

d. Panel (d)

Refer to above Figure #2 Assume that the graphs in this figure represent the demand and supply curves for bicycle helmets. Which panel best describes what happens in this market if there is a substantial increase in the price of bicycles? a. Panel (a) b. Panel (b) c. Panel (c) d. Panel (d)

b. Panel (b)

Refer to above Figure #2 Assume that the graphs in this figure represent the demand and supply curves for women's clothing. Which panel best describes what happens in this market when the wages of seamstresses rise? a. Panel (a) b. Panel (b) c. Panel (c) d. Panel (d)

b. there would be a shortage of 600 units.

Refer to above Figure, if the price is $10... a. There would be a surplus of 600 units. b. there would be a shortage of 600 units. c. there would be a surplus of 200 units. d. there would be a shortage of 200 units.

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

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 ________." a. the price of baseballs increased and the demand for baseballs decreased b. the equilibrium quantity of baseballs increased c. the price of baseballs increased and the quantity demanded of baseballs decreased d. the price of baseballs increased. The higher price caused the supply of baseballs to increase

b. market power.

The ability to influence the market price of a product is: a. competitive pricing. b. market power. c. microeconomic pricing. d. economic power.

a. The equilibrium point will move from A to E.

The graph in above figure #3 illustrates an initial competitive equilibrium in the market for apples at the intersection of D1 and S1 (point A). If the price of oranges, a substitute for apples, decreases and the wages of apple workers increase, how will the equilibrium point change? a. The equilibrium point will move from A to E. b. The equilibrium point will move from A to B. c. The equilibrium point will move from A to C. d. The equilibrium will first move from A to B, then return to A.

c. There will be no change in the equilibrium point.

The graph in above figure #3 illustrates an initial competitive equilibrium in the market for apples at the intersection of D1 and S1 (point A). If there is a shortage of apples, how will the equilibrium point change? a. The equilibrium point will move from A to B. b. The equilibrium point will move from A to C. c. There will be no change in the equilibrium point. d. The equilibrium point will move from A to E.

b. The equilibrium point will move from B to C.

The graph in above figure #3 illustrates an initial competitive equilibrium in the market for sugar at the intersection of D1 and S2 (point B). If there is an decrease in the price of fertilizer used on sugar cane and there is a decrease in tastes for sugar-sweetened soft drinks, how will the equilibrium point change? a. The equilibrium point will move from B to A. b. The equilibrium point will move from B to C. c. There will be no change in the equilibrium point. d. The equilibrium point will move from B to E.

d. government

The term public, as used in this course, refers to: a. consumers b. businesses c. workers d. government

c. technology change

Which of the following does not represent a market failure? a. spillovers b. market power c. technology change d. the need for public goods and services

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

Which of the following is evidence of a shortage of walnuts? a. Firms lower the price of walnuts. b. The price of cashews is lowered in order to make up for the walnut shortage. c. The equilibrium price of walnuts falls due to a decrease in demand. d. The quantity of walnuts demanded is greater than the quantity supplied.

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

Which of the following is evidence of a surplus of bananas? a. Firms raise the price of bananas. b. The price of bananas is lowered in order to increase sales. c. The equilibrium price of bananas rises due to an increase in demand. d. The quantity of bananas demanded is greater than the quantity supplied.

a. a school

Which of the following is generally not a private good? a. a school b. a house c. a factory d. a restaurant

b. At equilibrium, quantity demanded equals quantity supplied.

Which of the following is the correct way to describe equilibrium in a market? a. At equilibrium, demand equals supply. b. At equilibrium, quantity demanded equals quantity supplied. c. At equilibrium, market forces no longer apply. d. At equilibrium, scarcity is eliminated.

c. Panel (c)

efer to above Figure #2 Assume that the graphs in this figure represent the demand and supply curves for frozen yogurt. Which panel describes what happens in the market for frozen yogurt when the price of ice cream, a substitute product, increases? a. Panel (a) b. Panel (b) c. Panel (c) d. Panel (d)