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Deck 4: The Market Forces of Supply and Demand
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Question
Question
Figure 4-1 
Refer to Figure 4-1. What could cause the movement from S to S1?
A)a decrease in the price of the good
B)an improvement in technology
C)an increase in income
D)an increase in input prices
Refer to Figure 4-1. What could cause the movement from S to S1?
A)a decrease in the price of the good
B)an improvement in technology
C)an increase in income
D)an increase in input prices
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Question
Figure 4-2 
Refer to Figure 4-2. What happens at a price of $35?
A)There would be a shortage of 400 units.
B)There would be a shortage of 200 units.
C)There would be a surplus of 200 units.
D)There would be a surplus of 400 units.
E)The market would be in equilibrium.
Refer to Figure 4-2. What happens at a price of $35?
A)There would be a shortage of 400 units.
B)There would be a shortage of 200 units.
C)There would be a surplus of 200 units.
D)There would be a surplus of 400 units.
E)The market would be in equilibrium.
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Figure 4-2
Refer to Figure 4-2. What are the equilibrium price and quantity?
A)$35 and 200
B)$35 and 600
C)$25 and 400
D)$15 and 200
Refer to Figure 4-2. What are the equilibrium price and quantity?
A)$35 and 200
B)$35 and 600
C)$25 and 400
D)$15 and 200
Question
Figure 4-1
Refer to Figure 4-1. What is the movement from S1 to S called?
A)a decrease in supply
B)a decrease in quantity supplied
C)an increase in supply
D)an increase in quantity supplied
Refer to Figure 4-1. What is the movement from S1 to S called?
A)a decrease in supply
B)a decrease in quantity supplied
C)an increase in supply
D)an increase in quantity supplied
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Question
Figure 4-1
Refer to Figure 4-1. What could cause the movement from S1 to S?
A)a decrease in the price of the good
B)an improvement in technology
C)an increase in income
D)an increase in input prices
Refer to Figure 4-1. What could cause the movement from S1 to S?
A)a decrease in the price of the good
B)an improvement in technology
C)an increase in income
D)an increase in input prices
Question
Figure 4-2
Refer to Figure 4-2. What happens at a price of $15?
A)There would be a shortage of 400 units.
B)There would be a surplus of 400 units.
C)There would be a shortage of 200 units.
D)There would be a shortage of 400 units.
Refer to Figure 4-2. What happens at a price of $15?
A)There would be a shortage of 400 units.
B)There would be a surplus of 400 units.
C)There would be a shortage of 200 units.
D)There would be a shortage of 400 units.
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Question
Figure 4-1
Refer to Figure 4-1. What is the movement from S to S1 called?
A)a decrease in supply
B)a decrease in quantity supplied
C)an increase in supply
D)an increase in quantity supplied
Refer to Figure 4-1. What is the movement from S to S1 called?
A)a decrease in supply
B)a decrease in quantity supplied
C)an increase in supply
D)an increase in quantity supplied
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Figure 4-4 
Refer to Figure 4-4. If the price is $10, what would happen?
A)There would be a shortage of 200 and the price would rise.
B)There would be a surplus of 200 and the price would fall.
C)There would be a shortage of 600 and the price would rise.
D)There would be a surplus of 600 and the price would fall.
Refer to Figure 4-4. If the price is $10, what would happen?
A)There would be a shortage of 200 and the price would rise.
B)There would be a surplus of 200 and the price would fall.
C)There would be a shortage of 600 and the price would rise.
D)There would be a surplus of 600 and the price would fall.
Question
Figure 4-3 
Refer to Figure 4-3. In this market, what are the equilibrium price and quantity?
A)$14 and 70
B)$12 and 40
C)$10 and 50
D)$8 and 50
Refer to Figure 4-3. In this market, what are the equilibrium price and quantity?
A)$14 and 70
B)$12 and 40
C)$10 and 50
D)$8 and 50
Question
Figure 4-3
Refer to Figure 4-3. If the price in this market is currently $14, what would happen?
A)There would be a shortage of 20 units and the price would tend to rise.
B)There would be a surplus of 20 units and the price would tend to fall.
C)There would be a shortage of 40 units and the price would tend to rise.
D)There would be a surplus of 40 units and the price would tend to fall.
Refer to Figure 4-3. If the price in this market is currently $14, what would happen?
A)There would be a shortage of 20 units and the price would tend to rise.
B)There would be a surplus of 20 units and the price would tend to fall.
C)There would be a shortage of 40 units and the price would tend to rise.
D)There would be a surplus of 40 units and the price would tend to fall.
Question
Figure 4-3
Refer to Figure 4-3. If price in this market is currently $8, what would happen?
A)Quantity supplied would be 40 and quantity demanded would be 60.
B)Quantity supplied would be 60 and quantity demanded would be 40.
C)Quantity supplied would be 50 and quantity demanded would be 50.
D)Quantity supplied would be 70 and quantity demanded would be 30.
Refer to Figure 4-3. If price in this market is currently $8, what would happen?
A)Quantity supplied would be 40 and quantity demanded would be 60.
B)Quantity supplied would be 60 and quantity demanded would be 40.
C)Quantity supplied would be 50 and quantity demanded would be 50.
D)Quantity supplied would be 70 and quantity demanded would be 30.
Question
Table 4-2
Refer to Table 4-2. If the price were $2, what would happen?
A)A shortage of 25 units would exist and the price would tend to fall.
B)A surplus of 50 units would exist and the price would tend to rise.
C)A surplus of 25 units would exist and the price would tend to fall.
D)A shortage of 50 units would exist and the price would tend to rise.
Refer to Table 4-2. If the price were $2, what would happen?
A)A shortage of 25 units would exist and the price would tend to fall.
B)A surplus of 50 units would exist and the price would tend to rise.
C)A surplus of 25 units would exist and the price would tend to fall.
D)A shortage of 50 units would exist and the price would tend to rise.
Question
Table 4-2
Refer to Table 4-2. What would the equilibrium price and quantity be?
A)$4 and 40.
B)$6 and 30
C)$8 and 30
D)$10 and 35
Refer to Table 4-2. What would the equilibrium price and quantity be?
A)$4 and 40.
B)$6 and 30
C)$8 and 30
D)$10 and 35
Question
Figure 4-2
Refer to Figure 4-2. What happens at the equilibrium price?
A)200 units would be supplied and demanded
B)400 units would be supplied and demanded
C)600 units would be supplied and demanded
D)600 units would be supplied, but only 200 would be demanded
Refer to Figure 4-2. What happens at the equilibrium price?
A)200 units would be supplied and demanded
B)400 units would be supplied and demanded
C)600 units would be supplied and demanded
D)600 units would be supplied, but only 200 would be demanded
Question
Figure 4-4
Refer to Figure 4-4. In this market, what would the equilibrium price and quantity be?
A)$15 and 400
B)$20 and 600
C)$25 and 500
D)$25 and 800
Refer to Figure 4-4. In this market, what would the equilibrium price and quantity be?
A)$15 and 400
B)$20 and 600
C)$25 and 500
D)$25 and 800
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Figure 4-4
Refer to Figure 4-4. At a price of $20, which would NOT be true?
A)The market would be in equilibrium.
B)Equilibrium price would be equal to equilibrium quantity.
C)There would be no pressure for price to change.
D)600 units would be bought and sold.
Refer to Figure 4-4. At a price of $20, which would NOT be true?
A)The market would be in equilibrium.
B)Equilibrium price would be equal to equilibrium quantity.
C)There would be no pressure for price to change.
D)600 units would be bought and sold.
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Figure 4-4
Refer to Figure 4-4. If the price is $15, what would the quantity supplied be?
A)200
B)400
C)500
D)700
Refer to Figure 4-4. If the price is $15, what would the quantity supplied be?
A)200
B)400
C)500
D)700
Question
Figure 4-4
Refer to Figure 4-4. If the price is $25, what would happen?
A)There would be a surplus of 300 and the price would fall.
B)There would be a surplus of 200 and the price would fall.
C)There would be a shortage of 200 and the price would rise.
D)There would be a shortage of 300 and the price would rise.
Refer to Figure 4-4. If the price is $25, what would happen?
A)There would be a surplus of 300 and the price would fall.
B)There would be a surplus of 200 and the price would fall.
C)There would be a shortage of 200 and the price would rise.
D)There would be a shortage of 300 and the price would rise.
Question
Figure 4-2
Refer to Figure 4-2. What happens at a price of $35?
A)A shortage would exist and the price would tend to fall.
B)A shortage would exist and the price would tend to rise.
C)A surplus would exist and the price would tend to rise.
D)A surplus would exist and the price would tend to fall.
Refer to Figure 4-2. What happens at a price of $35?
A)A shortage would exist and the price would tend to fall.
B)A shortage would exist and the price would tend to rise.
C)A surplus would exist and the price would tend to rise.
D)A surplus would exist and the price would tend to fall.
Question
Figure 4-4
Refer to Figure 4-4. If the price is $25, what would the quantity demanded be?
A)400
B)500
C)600
D)800
Refer to Figure 4-4. If the price is $25, what would the quantity demanded be?
A)400
B)500
C)600
D)800
Question
Table 4-2
Refer to Table 4-2. If the price were $8, what would happen?
A)A surplus of 50 units would exist and the price would tend to fall.
B)A surplus of 10 units would exist and the price would tend to fall.
C)A surplus of 25 units would exist and the price would tend to fall.
D)A shortage of 25 units would exist and the price would tend to rise.
Refer to Table 4-2. If the price were $8, what would happen?
A)A surplus of 50 units would exist and the price would tend to fall.
B)A surplus of 10 units would exist and the price would tend to fall.
C)A surplus of 25 units would exist and the price would tend to fall.
D)A shortage of 25 units would exist and the price would tend to rise.
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Figure 4-5 
Refer to Figure 4-5. Which of the four graphs represents the market for peanut butter after a major hurricane hits the peanut-growing area?
A)graph A
B)graph B
C)graph C
D)graph D
Refer to Figure 4-5. Which of the four graphs represents the market for peanut butter after a major hurricane hits the peanut-growing area?
A)graph A
B)graph B
C)graph C
D)graph D
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Figure 4-5
Refer to Figure 4-5. Which of the four graphs shown illustrates an increase in quantity supplied?
A)graph A
B)graph B
C)graph C
D)graph D
Refer to Figure 4-5. Which of the four graphs shown illustrates an increase in quantity supplied?
A)graph A
B)graph B
C)graph C
D)graph D
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Figure 4-5
Refer to Figure 4-5. Which of the four graphs represents the market for winter boots in June?
A)graph A
B)graph B
C)graph C
D)graph D
Refer to Figure 4-5. Which of the four graphs represents the market for winter boots in June?
A)graph A
B)graph B
C)graph C
D)graph D
Question
Figure 4-5
Refer to Figure 4-5. Which of the four graphs shown illustrates a decrease in quantity demanded?
A)graph A
B)graph B
C)graph C
D)graph D
Refer to Figure 4-5. Which of the four graphs shown illustrates a decrease in quantity demanded?
A)graph A
B)graph B
C)graph C
D)graph D
Question
Figure 4-5
Refer to Figure 4-5. Graph C shows which of the following?
A)an increase in demand
B)an increase in quantity demanded
C)an increase in supply
D)an increase in input prices.
Refer to Figure 4-5. Graph C shows which of the following?
A)an increase in demand
B)an increase in quantity demanded
C)an increase in supply
D)an increase in input prices.
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Figure 4-5
Refer to Figure 4-5. Which of the four graphs represents the market for pizza delivery in a university town in September?
A)graph A
B)graph B
C)graph C
D)graph D
Refer to Figure 4-5. Which of the four graphs represents the market for pizza delivery in a university town in September?
A)graph A
B)graph B
C)graph C
D)graph D
Question
Figure 4-5
Refer to Figure 4-5. Which of the four graphs represents the market for cars after new technology was installed on assembly lines?
A)graph A
B)graph B
C)graph C
D)graph D
Refer to Figure 4-5. Which of the four graphs represents the market for cars after new technology was installed on assembly lines?
A)graph A
B)graph B
C)graph C
D)graph D
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Figure 4-5
Refer to Figure 4-5. Graph A shows which of the following?
A)an increase in demand
B)an increase in quantity demanded
C)an increase in supply
D)a decrease in consumer income.
Refer to Figure 4-5. Graph A shows which of the following?
A)an increase in demand
B)an increase in quantity demanded
C)an increase in supply
D)a decrease in consumer income.
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Table 4-3
Refer to Table 4-3. What is the space that would represent a decrease in equilibrium quantity and an indeterminate change in equilibrium price?
A)space A
B)space B
C)space C
D)space D
Refer to Table 4-3. What is the space that would represent a decrease in equilibrium quantity and an indeterminate change in equilibrium price?
A)space A
B)space B
C)space C
D)space D
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Table 4-3
Refer to Table 4-3. What is the space that would represent an increase in equilibrium quantity and an indeterminate change in equilibrium price?
A)space A
B)space B
C)space C
D)space D
Refer to Table 4-3. What is the space that would represent an increase in equilibrium quantity and an indeterminate change in equilibrium price?
A)space A
B)space B
C)space C
D)space D
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Table 4-3
Refer to Table 4-3. What is the space that would represent an increase in equilibrium price and an indeterminate change in equilibrium quantity?
A)space A
B)space B
C)space C
D)space D
Refer to Table 4-3. What is the space that would represent an increase in equilibrium price and an indeterminate change in equilibrium quantity?
A)space A
B)space B
C)space C
D)space D
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Table 4-3
Refer to Table 4-3. What is the space that would represent a decrease in equilibrium price and an indeterminate change in equilibrium quantity?
A)space A
B)space B
C)space C
D)space D
Refer to Table 4-3. What is the space that would represent a decrease in equilibrium price and an indeterminate change in equilibrium quantity?
A)space A
B)space B
C)space C
D)space D
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Deck 4: The Market Forces of Supply and Demand
1
If suppliers expect the price of their product to fall in the future, what will they do?
A)decrease supply now
B)increase supply now
C)increase supply in the future but not now
D)nothing, since there is nothing they can do to affect the price in the future
A)decrease supply now
B)increase supply now
C)increase supply in the future but not now
D)nothing, since there is nothing they can do to affect the price in the future
B
2
Figure 4-1
Refer to Figure 4-1. What could cause the movement from S to S1?
A)a decrease in the price of the good
B)an improvement in technology
C)an increase in income
D)an increase in input prices
Refer to Figure 4-1. What could cause the movement from S to S1?
A)a decrease in the price of the good
B)an improvement in technology
C)an increase in income
D)an increase in input prices
B
3
If a car manufacturer purchases new labour-saving technology for its assembly line, what would we NOT expect?
A)less labour to be used
B)the supply of cars produced to increase
C)costs to the firm to fall
D)the price of cars to be increased by the firm
A)less labour to be used
B)the supply of cars produced to increase
C)costs to the firm to fall
D)the price of cars to be increased by the firm
D
4
Figure 4-2
Refer to Figure 4-2. What happens at a price of $35?
A)There would be a shortage of 400 units.
B)There would be a shortage of 200 units.
C)There would be a surplus of 200 units.
D)There would be a surplus of 400 units.
E)The market would be in equilibrium.
Refer to Figure 4-2. What happens at a price of $35?
A)There would be a shortage of 400 units.
B)There would be a shortage of 200 units.
C)There would be a surplus of 200 units.
D)There would be a surplus of 400 units.
E)The market would be in equilibrium.
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5
What is another term for equilibrium price?
A)balancing price
B)market-clearing price
C)constant price
D)satisfactory price
A)balancing price
B)market-clearing price
C)constant price
D)satisfactory price
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6
Recent forest fires in the western provinces are expected to cause the price of lumber to rise in the next 6 months. As a result, what can we expect to happen to the supply of lumber?
A)fall in 6 months, but not now
B)increase in 6 months when the price goes up
C)fall now
D)increase now to meet as much demand as possible
A)fall in 6 months, but not now
B)increase in 6 months when the price goes up
C)fall now
D)increase now to meet as much demand as possible
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7
What happens at the equilibrium price?
A)Buyers have an incentive to buy more.
B)It is possible for there to be a shortage.
C)Firms have an incentive to increase production.
D)Everyone in the market has been satisfied.
A)Buyers have an incentive to buy more.
B)It is possible for there to be a shortage.
C)Firms have an incentive to increase production.
D)Everyone in the market has been satisfied.
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8
Figure 4-2
Refer to Figure 4-2. What are the equilibrium price and quantity?
A)$35 and 200
B)$35 and 600
C)$25 and 400
D)$15 and 200
Refer to Figure 4-2. What are the equilibrium price and quantity?
A)$35 and 200
B)$35 and 600
C)$25 and 400
D)$15 and 200
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9
Figure 4-1
Refer to Figure 4-1. What is the movement from S1 to S called?
A)a decrease in supply
B)a decrease in quantity supplied
C)an increase in supply
D)an increase in quantity supplied
Refer to Figure 4-1. What is the movement from S1 to S called?
A)a decrease in supply
B)a decrease in quantity supplied
C)an increase in supply
D)an increase in quantity supplied
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10
What happens if there is a shortage of a good at the current price?
A)Sellers are producing more than buyers wish to buy.
B)The market must be in equilibrium.
C)The price is below the equilibrium price.
D)Quantity demanded equals quantity supplied.
A)Sellers are producing more than buyers wish to buy.
B)The market must be in equilibrium.
C)The price is below the equilibrium price.
D)Quantity demanded equals quantity supplied.
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11
What is the price where quantity supplied equals quantity demanded?
A)coordinating price
B)monopoly price
C)equilibrium price
D)balancing point
A)coordinating price
B)monopoly price
C)equilibrium price
D)balancing point
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12
Figure 4-1
Refer to Figure 4-1. What could cause the movement from S1 to S?
A)a decrease in the price of the good
B)an improvement in technology
C)an increase in income
D)an increase in input prices
Refer to Figure 4-1. What could cause the movement from S1 to S?
A)a decrease in the price of the good
B)an improvement in technology
C)an increase in income
D)an increase in input prices
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13
Figure 4-2
Refer to Figure 4-2. What happens at a price of $15?
A)There would be a shortage of 400 units.
B)There would be a surplus of 400 units.
C)There would be a shortage of 200 units.
D)There would be a shortage of 400 units.
Refer to Figure 4-2. What happens at a price of $15?
A)There would be a shortage of 400 units.
B)There would be a surplus of 400 units.
C)There would be a shortage of 200 units.
D)There would be a shortage of 400 units.
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14
When evaluating differences or similarities between an increase in supply and an increase in quantity supplied, what do we know?
A)The former is a shift of the curve and the latter is a movement along the curve.
B)The former is a movement along the curve and the latter is a shift of the curve.
C)Both are shifts of the supply curve.
D)Both are movements along the curve.
A)The former is a shift of the curve and the latter is a movement along the curve.
B)The former is a movement along the curve and the latter is a shift of the curve.
C)Both are shifts of the supply curve.
D)Both are movements along the curve.
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15
Figure 4-1
Refer to Figure 4-1. What is the movement from S to S1 called?
A)a decrease in supply
B)a decrease in quantity supplied
C)an increase in supply
D)an increase in quantity supplied
Refer to Figure 4-1. What is the movement from S to S1 called?
A)a decrease in supply
B)a decrease in quantity supplied
C)an increase in supply
D)an increase in quantity supplied
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16
Wheat is the main input in the production of flour. If the price of wheat decreases, all else equal, what would we expect?
A)the supply of flour to be unaffected
B)the supply of flour to decrease
C)the supply of flour to increase
D)the demand for flour to decrease
A)the supply of flour to be unaffected
B)the supply of flour to decrease
C)the supply of flour to increase
D)the demand for flour to decrease
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17
Funsters Inc., the largest toy company in Canada, sells its most popular doll for $35. It has just learned that its leading competitor Toysorama is mass producing an excellent copy and plans to flood the market with their $10 doll in 6 weeks. What should Funsters do?
A)increase the supply of their doll now before the other doll hits the market
B)fight fire with fire and decrease supply for 6 weeks, then increase the supply of its doll too
C)continue business as usual, since consumers will not buy the cheaper imitation
D)discontinue this doll
A)increase the supply of their doll now before the other doll hits the market
B)fight fire with fire and decrease supply for 6 weeks, then increase the supply of its doll too
C)continue business as usual, since consumers will not buy the cheaper imitation
D)discontinue this doll
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18
What is the unique point at which the supply and demand curves intersect?
A)market unity
B)an agreement
C)cohesion
D)equilibrium
A)market unity
B)an agreement
C)cohesion
D)equilibrium
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19
Workers at a bicycle assembly plant currently make minimum wage. If the provincial government increases the minimum wage by $1.00 an hour, what will likely happen?
A)Demand for bicycle assembly workers will increase.
B)Supply of bicycles will shift to the right.
C)Supply of bicycles will shift to the left.
D)The firm must increase output to maintain profit levels.
A)Demand for bicycle assembly workers will increase.
B)Supply of bicycles will shift to the right.
C)Supply of bicycles will shift to the left.
D)The firm must increase output to maintain profit levels.
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20
Wheat is the main input in the production of flour. If the price of wheat increases, all else equal, what would we expect?
A)the supply of flour to be unaffected
B)the supply of flour to decrease
C)the supply of flour to increase
D)the demand for flour to decrease
A)the supply of flour to be unaffected
B)the supply of flour to decrease
C)the supply of flour to increase
D)the demand for flour to decrease
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21
If a surplus exists in a market, what do we know?
A)The actual price is above equilibrium price and quantity supplied is greater than quantity demanded.
B)The actual price is above equilibrium price and quantity demanded is greater than quantity supplied.
C)The actual price is below equilibrium price and quantity demanded is greater than quantity supplied.
D)The actual price is below equilibrium price and quantity supplied is greater than quantity demanded.
A)The actual price is above equilibrium price and quantity supplied is greater than quantity demanded.
B)The actual price is above equilibrium price and quantity demanded is greater than quantity supplied.
C)The actual price is below equilibrium price and quantity demanded is greater than quantity supplied.
D)The actual price is below equilibrium price and quantity supplied is greater than quantity demanded.
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22
Figure 4-4
Refer to Figure 4-4. If the price is $10, what would happen?
A)There would be a shortage of 200 and the price would rise.
B)There would be a surplus of 200 and the price would fall.
C)There would be a shortage of 600 and the price would rise.
D)There would be a surplus of 600 and the price would fall.
Refer to Figure 4-4. If the price is $10, what would happen?
A)There would be a shortage of 200 and the price would rise.
B)There would be a surplus of 200 and the price would fall.
C)There would be a shortage of 600 and the price would rise.
D)There would be a surplus of 600 and the price would fall.
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23
Figure 4-3
Refer to Figure 4-3. In this market, what are the equilibrium price and quantity?
A)$14 and 70
B)$12 and 40
C)$10 and 50
D)$8 and 50
Refer to Figure 4-3. In this market, what are the equilibrium price and quantity?
A)$14 and 70
B)$12 and 40
C)$10 and 50
D)$8 and 50
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24
Figure 4-3
Refer to Figure 4-3. If the price in this market is currently $14, what would happen?
A)There would be a shortage of 20 units and the price would tend to rise.
B)There would be a surplus of 20 units and the price would tend to fall.
C)There would be a shortage of 40 units and the price would tend to rise.
D)There would be a surplus of 40 units and the price would tend to fall.
Refer to Figure 4-3. If the price in this market is currently $14, what would happen?
A)There would be a shortage of 20 units and the price would tend to rise.
B)There would be a surplus of 20 units and the price would tend to fall.
C)There would be a shortage of 40 units and the price would tend to rise.
D)There would be a surplus of 40 units and the price would tend to fall.
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25
Figure 4-3
Refer to Figure 4-3. If price in this market is currently $8, what would happen?
A)Quantity supplied would be 40 and quantity demanded would be 60.
B)Quantity supplied would be 60 and quantity demanded would be 40.
C)Quantity supplied would be 50 and quantity demanded would be 50.
D)Quantity supplied would be 70 and quantity demanded would be 30.
Refer to Figure 4-3. If price in this market is currently $8, what would happen?
A)Quantity supplied would be 40 and quantity demanded would be 60.
B)Quantity supplied would be 60 and quantity demanded would be 40.
C)Quantity supplied would be 50 and quantity demanded would be 50.
D)Quantity supplied would be 70 and quantity demanded would be 30.
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26
Table 4-2
Refer to Table 4-2. If the price were $2, what would happen?
A)A shortage of 25 units would exist and the price would tend to fall.
B)A surplus of 50 units would exist and the price would tend to rise.
C)A surplus of 25 units would exist and the price would tend to fall.
D)A shortage of 50 units would exist and the price would tend to rise.
Refer to Table 4-2. If the price were $2, what would happen?
A)A shortage of 25 units would exist and the price would tend to fall.
B)A surplus of 50 units would exist and the price would tend to rise.
C)A surplus of 25 units would exist and the price would tend to fall.
D)A shortage of 50 units would exist and the price would tend to rise.
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27
Table 4-2
Refer to Table 4-2. What would the equilibrium price and quantity be?
A)$4 and 40.
B)$6 and 30
C)$8 and 30
D)$10 and 35
Refer to Table 4-2. What would the equilibrium price and quantity be?
A)$4 and 40.
B)$6 and 30
C)$8 and 30
D)$10 and 35
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28
Figure 4-2
Refer to Figure 4-2. What happens at the equilibrium price?
A)200 units would be supplied and demanded
B)400 units would be supplied and demanded
C)600 units would be supplied and demanded
D)600 units would be supplied, but only 200 would be demanded
Refer to Figure 4-2. What happens at the equilibrium price?
A)200 units would be supplied and demanded
B)400 units would be supplied and demanded
C)600 units would be supplied and demanded
D)600 units would be supplied, but only 200 would be demanded
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29
Figure 4-4
Refer to Figure 4-4. In this market, what would the equilibrium price and quantity be?
A)$15 and 400
B)$20 and 600
C)$25 and 500
D)$25 and 800
Refer to Figure 4-4. In this market, what would the equilibrium price and quantity be?
A)$15 and 400
B)$20 and 600
C)$25 and 500
D)$25 and 800
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30
What happens when there is a surplus in a market?
A)There is upward pressure on price.
B)There is downward pressure on price.
C)The market could still be in equilibrium.
D)There are too many buyers chasing too few goods.
A)There is upward pressure on price.
B)There is downward pressure on price.
C)The market could still be in equilibrium.
D)There are too many buyers chasing too few goods.
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31
What happens when there is a shortage in a market?
A)There is downward pressure on price.
B)There is upward pressure on price.
C)The market could still be in equilibrium.
D)The price must be above equilibrium.
A)There is downward pressure on price.
B)There is upward pressure on price.
C)The market could still be in equilibrium.
D)The price must be above equilibrium.
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32
Figure 4-4
Refer to Figure 4-4. At a price of $20, which would NOT be true?
A)The market would be in equilibrium.
B)Equilibrium price would be equal to equilibrium quantity.
C)There would be no pressure for price to change.
D)600 units would be bought and sold.
Refer to Figure 4-4. At a price of $20, which would NOT be true?
A)The market would be in equilibrium.
B)Equilibrium price would be equal to equilibrium quantity.
C)There would be no pressure for price to change.
D)600 units would be bought and sold.
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33
Suppose roses are currently selling for $40.00 per dozen. The equilibrium price of roses is $30.00 per dozen. What would we expect?
A)a shortage to exist and the market price of roses to increase
B)a shortage to exist and the market price of roses to decrease
C)a surplus to exist and the market price of roses to increase
D)a surplus to exist and the market price of roses to decrease
A)a shortage to exist and the market price of roses to increase
B)a shortage to exist and the market price of roses to decrease
C)a surplus to exist and the market price of roses to increase
D)a surplus to exist and the market price of roses to decrease
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34
Figure 4-4
Refer to Figure 4-4. If the price is $15, what would the quantity supplied be?
A)200
B)400
C)500
D)700
Refer to Figure 4-4. If the price is $15, what would the quantity supplied be?
A)200
B)400
C)500
D)700
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35
Figure 4-4
Refer to Figure 4-4. If the price is $25, what would happen?
A)There would be a surplus of 300 and the price would fall.
B)There would be a surplus of 200 and the price would fall.
C)There would be a shortage of 200 and the price would rise.
D)There would be a shortage of 300 and the price would rise.
Refer to Figure 4-4. If the price is $25, what would happen?
A)There would be a surplus of 300 and the price would fall.
B)There would be a surplus of 200 and the price would fall.
C)There would be a shortage of 200 and the price would rise.
D)There would be a shortage of 300 and the price would rise.
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36
Figure 4-2
Refer to Figure 4-2. What happens at a price of $35?
A)A shortage would exist and the price would tend to fall.
B)A shortage would exist and the price would tend to rise.
C)A surplus would exist and the price would tend to rise.
D)A surplus would exist and the price would tend to fall.
Refer to Figure 4-2. What happens at a price of $35?
A)A shortage would exist and the price would tend to fall.
B)A shortage would exist and the price would tend to rise.
C)A surplus would exist and the price would tend to rise.
D)A surplus would exist and the price would tend to fall.
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37
Figure 4-4
Refer to Figure 4-4. If the price is $25, what would the quantity demanded be?
A)400
B)500
C)600
D)800
Refer to Figure 4-4. If the price is $25, what would the quantity demanded be?
A)400
B)500
C)600
D)800
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38
Table 4-2
Refer to Table 4-2. If the price were $8, what would happen?
A)A surplus of 50 units would exist and the price would tend to fall.
B)A surplus of 10 units would exist and the price would tend to fall.
C)A surplus of 25 units would exist and the price would tend to fall.
D)A shortage of 25 units would exist and the price would tend to rise.
Refer to Table 4-2. If the price were $8, what would happen?
A)A surplus of 50 units would exist and the price would tend to fall.
B)A surplus of 10 units would exist and the price would tend to fall.
C)A surplus of 25 units would exist and the price would tend to fall.
D)A shortage of 25 units would exist and the price would tend to rise.
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39
Why do markets move toward equilibrium of supply and demand?
A)because of the actions of buyers and sellers
B)because of government regulations placed on market participants
C)because of increased competition among sellers
D)because of buyers' ability to affect market decisions
A)because of the actions of buyers and sellers
B)because of government regulations placed on market participants
C)because of increased competition among sellers
D)because of buyers' ability to affect market decisions
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40
Suppose roses are currently selling for $40.00 per dozen. The equilibrium price of roses is $50.00 per dozen. What would we expect?
A)a shortage to exist and the market price of roses to increase
B)a shortage to exist and the market price of roses to decrease
C)a surplus to exist and the market price of roses to increase
D)a surplus to exist and the market price of roses to decrease
A)a shortage to exist and the market price of roses to increase
B)a shortage to exist and the market price of roses to decrease
C)a surplus to exist and the market price of roses to increase
D)a surplus to exist and the market price of roses to decrease
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41
What will result from a decrease in resource costs to firms in a market?
A)a decrease in equilibrium price and an increase in equilibrium quantity
B)a decrease in equilibrium price and a decrease in equilibrium quantity
C)an increase in equilibrium price and no change in equilibrium quantity
D)an increase in equilibrium price and an increase in equilibrium quantity
A)a decrease in equilibrium price and an increase in equilibrium quantity
B)a decrease in equilibrium price and a decrease in equilibrium quantity
C)an increase in equilibrium price and no change in equilibrium quantity
D)an increase in equilibrium price and an increase in equilibrium quantity
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42
Which chain of events occurs in the correct order?
A)quantity supplied increases, price increases, demand increases
B)price increases, demand increases, quantity supplied increases
C)demand increases, price increases, quantity supplied increases
D)demand increases, quantity supplied increases, price increases.
A)quantity supplied increases, price increases, demand increases
B)price increases, demand increases, quantity supplied increases
C)demand increases, price increases, quantity supplied increases
D)demand increases, quantity supplied increases, price increases.
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43
You have been asked by your economics professor to graph the market for lumber and then to analyze the change that would occur in equilibrium price as a result of recent forest fires in the West. What would your first step be?
A)to decide which direction to shift the curve
B)to decide whether the fires affected demand or supply
C)to graph the shift to see the affect on equilibrium
D)to decide whether the fires shift demand or supply
A)to decide which direction to shift the curve
B)to decide whether the fires affected demand or supply
C)to graph the shift to see the affect on equilibrium
D)to decide whether the fires shift demand or supply
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44
Figure 4-5
Refer to Figure 4-5. Which of the four graphs represents the market for peanut butter after a major hurricane hits the peanut-growing area?
A)graph A
B)graph B
C)graph C
D)graph D
Refer to Figure 4-5. Which of the four graphs represents the market for peanut butter after a major hurricane hits the peanut-growing area?
A)graph A
B)graph B
C)graph C
D)graph D
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45
If the demand for a product increases, what would we expect?
A)equilibrium price to increase and equilibrium quantity to decrease
B)equilibrium price to decrease and equilibrium quantity to increase
C)equilibrium price and equilibrium quantity to both increase
D)equilibrium price and equilibrium quantity to both decrease
A)equilibrium price to increase and equilibrium quantity to decrease
B)equilibrium price to decrease and equilibrium quantity to increase
C)equilibrium price and equilibrium quantity to both increase
D)equilibrium price and equilibrium quantity to both decrease
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46
Figure 4-5
Refer to Figure 4-5. Which of the four graphs shown illustrates an increase in quantity supplied?
A)graph A
B)graph B
C)graph C
D)graph D
Refer to Figure 4-5. Which of the four graphs shown illustrates an increase in quantity supplied?
A)graph A
B)graph B
C)graph C
D)graph D
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47
If a shortage exists in a market, what do we know?
A)The actual price is below equilibrium price and quantity demanded is greater than quantity supplied.
B)The actual price is above equilibrium price and quantity demanded is greater than quantity supplied.
C)The actual price is above equilibrium price and quantity supplied is greater than quantity demanded.
D)The actual price is below equilibrium price and quantity supplied is greater than quantity demanded.
A)The actual price is below equilibrium price and quantity demanded is greater than quantity supplied.
B)The actual price is above equilibrium price and quantity demanded is greater than quantity supplied.
C)The actual price is above equilibrium price and quantity supplied is greater than quantity demanded.
D)The actual price is below equilibrium price and quantity supplied is greater than quantity demanded.
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48
Figure 4-5
Refer to Figure 4-5. Which of the four graphs represents the market for winter boots in June?
A)graph A
B)graph B
C)graph C
D)graph D
Refer to Figure 4-5. Which of the four graphs represents the market for winter boots in June?
A)graph A
B)graph B
C)graph C
D)graph D
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49
Figure 4-5
Refer to Figure 4-5. Which of the four graphs shown illustrates a decrease in quantity demanded?
A)graph A
B)graph B
C)graph C
D)graph D
Refer to Figure 4-5. Which of the four graphs shown illustrates a decrease in quantity demanded?
A)graph A
B)graph B
C)graph C
D)graph D
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50
Figure 4-5
Refer to Figure 4-5. Graph C shows which of the following?
A)an increase in demand
B)an increase in quantity demanded
C)an increase in supply
D)an increase in input prices.
Refer to Figure 4-5. Graph C shows which of the following?
A)an increase in demand
B)an increase in quantity demanded
C)an increase in supply
D)an increase in input prices.
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51
What would an early frost in the vineyards of the Okanagan Valley cause?
A)an increase in the demand for wine, increasing price
B)an increase in the supply of wine, decreasing price
C)a decrease in the demand for wine, decreasing price
D)a decrease in the supply of wine, increasing price
A)an increase in the demand for wine, increasing price
B)an increase in the supply of wine, decreasing price
C)a decrease in the demand for wine, decreasing price
D)a decrease in the supply of wine, increasing price
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52
Figure 4-5
Refer to Figure 4-5. Which of the four graphs represents the market for pizza delivery in a university town in September?
A)graph A
B)graph B
C)graph C
D)graph D
Refer to Figure 4-5. Which of the four graphs represents the market for pizza delivery in a university town in September?
A)graph A
B)graph B
C)graph C
D)graph D
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53
Figure 4-5
Refer to Figure 4-5. Which of the four graphs represents the market for cars after new technology was installed on assembly lines?
A)graph A
B)graph B
C)graph C
D)graph D
Refer to Figure 4-5. Which of the four graphs represents the market for cars after new technology was installed on assembly lines?
A)graph A
B)graph B
C)graph C
D)graph D
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54
Which of the following is NOT one of the steps in analyzing how some event affects a market?
A)Determine the number of market participants.
B)Decide whether the curve shifts to the right or to the left.
C)Determine whether the event shifts the supply, the demand, or both curves.
D)Use a supply-demand diagram to examine how the shift(s) affect the equilibrium.
A)Determine the number of market participants.
B)Decide whether the curve shifts to the right or to the left.
C)Determine whether the event shifts the supply, the demand, or both curves.
D)Use a supply-demand diagram to examine how the shift(s) affect the equilibrium.
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55
Figure 4-5
Refer to Figure 4-5. Graph A shows which of the following?
A)an increase in demand
B)an increase in quantity demanded
C)an increase in supply
D)a decrease in consumer income.
Refer to Figure 4-5. Graph A shows which of the following?
A)an increase in demand
B)an increase in quantity demanded
C)an increase in supply
D)a decrease in consumer income.
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56
Which of the following will definitely cause equilibrium quantity to fall?
A)demand increases and supply decreases
B)demand and supply both decrease
C)demand decreases and supply increases
D)demand and supply both increase
A)demand increases and supply decreases
B)demand and supply both decrease
C)demand decreases and supply increases
D)demand and supply both increase
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57
What do comparative statics involve?
A)comparisons of varying prices
B)evaluation of buyers' reluctance to pay the market price
C)comparing the old equilibrium and the new equilibrium
D)evaluating the friction that develops between buyers and sellers
A)comparisons of varying prices
B)evaluation of buyers' reluctance to pay the market price
C)comparing the old equilibrium and the new equilibrium
D)evaluating the friction that develops between buyers and sellers
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58
What is step one in the Three-Step program for analyzing changes in equilibrium?
A)Decide which direction the curve shifts.
B)Decide whether the event shifts the supply or demand curve.
C)Use the supply-and-demand diagram to see how the shift changes the original equilibrium.
D)Analyze how equilibrium price and quantity have changed.
A)Decide which direction the curve shifts.
B)Decide whether the event shifts the supply or demand curve.
C)Use the supply-and-demand diagram to see how the shift changes the original equilibrium.
D)Analyze how equilibrium price and quantity have changed.
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59
Which of the following would definitely result in a higher price in the market for Snickers?
A)demand increases and supply decreases
B)demand and supply both decrease
C)demand decreases and supply increases
D)demand and supply both increase
A)demand increases and supply decreases
B)demand and supply both decrease
C)demand decreases and supply increases
D)demand and supply both increase
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60
Suppose there is an earthquake that destroys several corn canneries. Which of the following would NOT occur as a direct result of this event?
A)Sellers would not be willing to produce and sell as much as before at each relevant price.
B)The supply would decrease.
C)Buyers would not be willing to buy as much as before at each relevant price.
D)The equilibrium price would rise.
A)Sellers would not be willing to produce and sell as much as before at each relevant price.
B)The supply would decrease.
C)Buyers would not be willing to buy as much as before at each relevant price.
D)The equilibrium price would rise.
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61
If the demand for a product decreases, what would we expect?
A)equilibrium price to increase and equilibrium quantity to decrease
B)equilibrium price to decrease and equilibrium quantity to increase
C)equilibrium price and equilibrium quantity to both increase
D)equilibrium price and equilibrium quantity to both decrease
A)equilibrium price to increase and equilibrium quantity to decrease
B)equilibrium price to decrease and equilibrium quantity to increase
C)equilibrium price and equilibrium quantity to both increase
D)equilibrium price and equilibrium quantity to both decrease
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62
Suppose that demand increases AND supply decreases. What would happen in the market for the good?
A)Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous.
B)Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous.
C)Both equilibrium price and quantity would increase.
D)Both equilibrium price and quantity would decrease.
A)Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous.
B)Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous.
C)Both equilibrium price and quantity would increase.
D)Both equilibrium price and quantity would decrease.
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63
Suppose that the incomes of buyers in a particular market for a normal good decrease and there is also a reduction in input prices. What would we expect to occur in this market?
A)The equilibrium price would increase, but the impact on the amount sold in the market would be ambiguous.
B)The equilibrium price would decrease, but the impact on the amount sold in the market would be ambiguous.
C)Both equilibrium price and equilibrium quantity would increase.
D)Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
A)The equilibrium price would increase, but the impact on the amount sold in the market would be ambiguous.
B)The equilibrium price would decrease, but the impact on the amount sold in the market would be ambiguous.
C)Both equilibrium price and equilibrium quantity would increase.
D)Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
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64
Table 4-3
Refer to Table 4-3. What is the space that would represent a decrease in equilibrium quantity and an indeterminate change in equilibrium price?
A)space A
B)space B
C)space C
D)space D
Refer to Table 4-3. What is the space that would represent a decrease in equilibrium quantity and an indeterminate change in equilibrium price?
A)space A
B)space B
C)space C
D)space D
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65
Which of the following would result in an increase in equilibrium price and an ambiguous change in equilibrium quantity?
A)an increase in supply and demand
B)an increase in supply and a decrease in demand
C)a decrease in supply and an increase in demand
D)a decrease in supply and demand
A)an increase in supply and demand
B)an increase in supply and a decrease in demand
C)a decrease in supply and an increase in demand
D)a decrease in supply and demand
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66
Suppose that the number of buyers in a market decreases and a technological advancement occurs. What would we expect to happen in the market?
A)The equilibrium price would increase, but the impact on the amount sold in the market would be ambiguous.
B)The equilibrium price would decrease, but the impact on the amount sold in the market would be ambiguous.
C)Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
D)Both equilibrium price and equilibrium quantity would increase.
A)The equilibrium price would increase, but the impact on the amount sold in the market would be ambiguous.
B)The equilibrium price would decrease, but the impact on the amount sold in the market would be ambiguous.
C)Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
D)Both equilibrium price and equilibrium quantity would increase.
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67
Table 4-3
Refer to Table 4-3. What is the space that would represent an increase in equilibrium quantity and an indeterminate change in equilibrium price?
A)space A
B)space B
C)space C
D)space D
Refer to Table 4-3. What is the space that would represent an increase in equilibrium quantity and an indeterminate change in equilibrium price?
A)space A
B)space B
C)space C
D)space D
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68
If the supply of a product increases, what would we expect?
A)equilibrium price to increase and equilibrium quantity to decrease
B)equilibrium price to decrease and equilibrium quantity to increase
C)equilibrium price and equilibrium quantity to both increase
D)equilibrium price and equilibrium quantity to both decrease
A)equilibrium price to increase and equilibrium quantity to decrease
B)equilibrium price to decrease and equilibrium quantity to increase
C)equilibrium price and equilibrium quantity to both increase
D)equilibrium price and equilibrium quantity to both decrease
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69
Suppose that the incomes of buyers in a particular market for a normal good increase and there is also an increase in input prices. What would we expect to occur in this market?
A)The equilibrium price would increase, but the impact on the amount sold in the market would be ambiguous.
B)The equilibrium price would decrease, but the impact on the amount sold in the market would be ambiguous.
C)Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
D)Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous.
A)The equilibrium price would increase, but the impact on the amount sold in the market would be ambiguous.
B)The equilibrium price would decrease, but the impact on the amount sold in the market would be ambiguous.
C)Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
D)Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous.
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70
Table 4-3
Refer to Table 4-3. What is the space that would represent an increase in equilibrium price and an indeterminate change in equilibrium quantity?
A)space A
B)space B
C)space C
D)space D
Refer to Table 4-3. What is the space that would represent an increase in equilibrium price and an indeterminate change in equilibrium quantity?
A)space A
B)space B
C)space C
D)space D
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71
What would happen when supply and demand both increase?
A)equilibrium price will increase
B)equilibrium price will decrease
C)equilibrium quantity may increase, decrease, or remain unchanged
D)equilibrium price may increase, decrease, or remain unchanged
A)equilibrium price will increase
B)equilibrium price will decrease
C)equilibrium quantity may increase, decrease, or remain unchanged
D)equilibrium price may increase, decrease, or remain unchanged
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72
Which of the following would unambiguously cause a decrease in the equilibrium price of cotton shirts?
A)an increase in the price of wool shirts and a decrease in the price of raw cotton
B)a decrease in the price of wool shirts and a decrease in the price of raw cotton
C)an increase in the price of wool shirts and an increase in the price of raw cotton
D)a decrease in the price of wool shirts and an increase in the price of raw cotton
A)an increase in the price of wool shirts and a decrease in the price of raw cotton
B)a decrease in the price of wool shirts and a decrease in the price of raw cotton
C)an increase in the price of wool shirts and an increase in the price of raw cotton
D)a decrease in the price of wool shirts and an increase in the price of raw cotton
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73
Suppose that the incomes of buyers in a particular market for a normal good decrease and there is also an increase in input prices. What would we expect to occur in this market?
A)The equilibrium price would increase, but the impact on the amount sold in the market would be ambiguous.
B)The equilibrium price would decrease, but the impact on the amount sold in the market would be ambiguous.
C)Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
D)Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.
A)The equilibrium price would increase, but the impact on the amount sold in the market would be ambiguous.
B)The equilibrium price would decrease, but the impact on the amount sold in the market would be ambiguous.
C)Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
D)Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.
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74
Table 4-3
Refer to Table 4-3. What is the space that would represent a decrease in equilibrium price and an indeterminate change in equilibrium quantity?
A)space A
B)space B
C)space C
D)space D
Refer to Table 4-3. What is the space that would represent a decrease in equilibrium price and an indeterminate change in equilibrium quantity?
A)space A
B)space B
C)space C
D)space D
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75
Which of the following would cause both the equilibrium price and equilibrium quantity of number two grade potatoes (an inferior good) to increase?
A)an increase in consumer income
B)a decrease in consumer income
C)greater government restrictions on agricultural chemicals
D)fewer government restrictions on agricultural chemicals
A)an increase in consumer income
B)a decrease in consumer income
C)greater government restrictions on agricultural chemicals
D)fewer government restrictions on agricultural chemicals
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76
Suppose that the number of buyers in a market increases and a technological advancement occurs. What would we expect to happen in the market?
A)The equilibrium price would increase, but the impact on the amount sold in the market would be ambiguous.
B)The equilibrium price would decrease, but the impact on the amount sold in the market would be ambiguous.
C)Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
D)Both equilibrium price and equilibrium quantity would increase.
A)The equilibrium price would increase, but the impact on the amount sold in the market would be ambiguous.
B)The equilibrium price would decrease, but the impact on the amount sold in the market would be ambiguous.
C)Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
D)Both equilibrium price and equilibrium quantity would increase.
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77
If the supply of a product decreases, what would we expect?
A)equilibrium price to increase and equilibrium quantity to decrease
B)equilibrium price to decrease and equilibrium quantity to increase
C)equilibrium price and equilibrium quantity to both increase
D)equilibrium price and equilibrium quantity to both decrease
A)equilibrium price to increase and equilibrium quantity to decrease
B)equilibrium price to decrease and equilibrium quantity to increase
C)equilibrium price and equilibrium quantity to both increase
D)equilibrium price and equilibrium quantity to both decrease
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78
Suppose that the incomes of buyers in a particular market for a normal good increase and there is also a reduction in input prices. What would we expect to occur in this market?
A)The equilibrium price would increase, but the impact on the amount sold in the market would be ambiguous.
B)The equilibrium price would decrease, but the impact on the amount sold in the market would be ambiguous.
C)Both equilibrium price and equilibrium quantity would increase.
D)Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
A)The equilibrium price would increase, but the impact on the amount sold in the market would be ambiguous.
B)The equilibrium price would decrease, but the impact on the amount sold in the market would be ambiguous.
C)Both equilibrium price and equilibrium quantity would increase.
D)Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
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79
What would happen to the equilibrium price and quantity of coffee if the wages of coffee-bean pickers fell and the price of tea fell?
A)price will fall and the effect on quantity is ambiguous
B)price will rise and the effect on quantity is ambiguous
C)quantity will fall and the effect on price is ambiguous
D)quantity will rise and the effect on price is ambiguous
A)price will fall and the effect on quantity is ambiguous
B)price will rise and the effect on quantity is ambiguous
C)quantity will fall and the effect on price is ambiguous
D)quantity will rise and the effect on price is ambiguous
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80
Suppose that demand decreases AND supply decreases. What would you expect to occur in the market for the good?
A)Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous.
B)Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous.
C)Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.
D)Both equilibrium price and equilibrium quantity would increase.
A)Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous.
B)Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous.
C)Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.
D)Both equilibrium price and equilibrium quantity would increase.
Unlock Deck
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Unlock Deck
Unlock for access to all 303 flashcards in this deck.
