Deck 4: 4: Sec 44 Mc Supply and Demand Together

Question 1

In markets,prices move toward equilibrium because of

A)the actions of buyers and sellers.
B)government regulations placed on market participants.
C)increased competition among sellers.
D)buyers' ability to affect market outcomes.

Answer 1

A

Question 2

Which of the following events must 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

Answer 2

C

Question 3

Which of the following events must cause equilibrium price to rise?

A)demand increases and supply decreases
B)demand and supply both decrease
C)demand decreases and supply increases
D)demand and supply both increase

Answer 3

D

Question 4

Equilibrium price must increase when demand

A)increases and supply does not change,when demand does not change and supply decreases,and when demand decreases and supply increases simultaneously.
B)increases and supply does not change,when demand does not change and supply decreases,and when demand increases and supply decreases simultaneously.
C)decreases and supply does not change,when demand does not change and supply increases,and when demand decreases and supply increases simultaneously.
D)decreases and supply does not change,when demand does not change and supply increases,and when demand increases and supply decreases simultaneously.

Question 5

If the demand for a product increases,then we would expect equilibrium price

A)to increase and equilibrium quantity to decrease.
B)to decrease and equilibrium quantity to increase.
C)and equilibrium quantity both to increase.
D)and equilibrium quantity both to decrease.

Question 6

The unique point at which the supply and demand curves intersect is called

A)market harmony.
B)coincidence.
C)equivalence.
D)equilibrium.

Question 7

At the equilibrium price,the quantity of the good that buyers are willing and able to buy

A)is greater than the quantity that sellers are willing and able to sell.
B)exactly equals the quantity that sellers are willing and able to sell.
C)is less than the quantity that sellers are willing and able to sell.
D)Either a)or c)could be correct.

Question 8

The dictionary defines equilibrium as a situation in which forces

A)are in balance.
B)are the same.
C)clash.
D)remain constant.

Question 9

Equilibrium quantity must decrease when demand

A)increases and supply does not change,when demand does not change and supply decreases,and when both demand and supply decrease.
B)increases and supply does not change,when demand does not change and supply increases,and when both demand and supply decrease.
C)decreases and supply does not change,when demand does not change and supply increases,and when both demand and supply decrease.
D)decreases and supply does not change,when demand does not change and supply decreases,and when both demand and supply decrease.

Question 10

Which of the following events must cause equilibrium price 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

Question 11

Buyers are able to buy all they want to buy and sellers are able to sell all they want to sell at

A)prices at and above the equilibrium price.
B)prices at and below the equilibrium price.
C)prices above and below the equilibrium price,but not at the equilibrium price.
D)the equilibrium price but not above or below the equilibrium price.

Question 12

Another term for equilibrium price is

A)dynamic price.
B)market-clearing price.
C)quantity-defining price.
D)balance price.

Question 13

Which of the following events must cause equilibrium quantity to rise?

A)demand increases and supply decreases
B)demand and supply both decrease
C)demand decreases and supply increases
D)demand and supply both increase

Question 14

When supply and demand both increase,equilibrium

A)price will increase.
B)price will decrease.
C)quantity may increase,decrease,or remain unchanged.
D)price may increase,decrease,or remain unchanged.

Question 15

In a given market,how are the equilibrium price and the market-clearing price related?

A)There is no relationship.
B)They are the same price.
C)The market-clearing price exceeds the equilibrium price.
D)The equilibrium price exceeds the market-clearing price.

Question 16

If the demand for a product decreases,then we would expect equilibrium price

A)to increase and equilibrium quantity to decrease.
B)to decrease and equilibrium quantity to increase.
C)and equilibrium quantity to both increase.
D)and equilibrium quantity to both decrease.

Question 17

If the supply of a product increases,then we would expect equilibrium price

A)to increase and equilibrium quantity to decrease.
B)to decrease and equilibrium quantity to increase.
C)and equilibrium quantity to both increase.
D)and equilibrium quantity to both decrease.

Question 18

Equilibrium quantity must increase when demand

A)increases and supply does not change,when demand does not change and supply increases,and when both demand and supply increase.
B)increases and supply does not change,when demand does not change and supply increases,and when both demand and supply decrease.
C)decreases and supply does not change,when demand does not change and supply decreases,and when both demand and supply increase.
D)decreases and supply does not change,when demand does not change and supply decreases,and when both demand and supply decrease.

Question 19

Equilibrium price must decrease when demand

A)increases and supply does not change,when demand does not change and supply decreases,and when demand decreases and supply increases simultaneously.
B)increases and supply does not change,when demand does not change and supply decreases,and when demand increases and supply decreases simultaneously.
C)decreases and supply does not change,when demand does not change and supply increases,and when demand decreases and supply increases simultaneously.
D)decreases and supply does not change,when demand does not change and supply increases,and when demand increases and supply decreases simultaneously.

Question 20

If the supply of a product decreases,then we would expect equilibrium price

A)to increase and equilibrium quantity to decrease.
B)to decrease and equilibrium quantity to increase.
C)and equilibrium quantity to both increase.
D)and equilibrium quantity to both decrease.

Question 21

The law of supply and demand asserts that

A)demand curves and supply curves tend to shift to the right as time goes by.
B)the price of a good will eventually rise in response to an excess demand for that good.
C)when the supply curve for a good shifts,the demand curve for that good shifts in response.
D)the equilibrium price of a good will be rising more often than it will be falling.

Question 22

A surplus exists in a market if

A)there is an excess demand for the good.
B)quantity demanded exceeds quantity supplied.
C)the current price is above its equilibrium price.
D)All of the above are correct.

Question 23

When a shortage exists in a market,sellers

A)raise price,which increases quantity demanded and decreases quantity supplied until the shortage is eliminated.
B)raise price,which decreases quantity demanded and increases quantity supplied until the shortage is eliminated.
C)lower price,which increases quantity demanded and decreases quantity supplied until the shortage is eliminated.
D)lower price,which decreases quantity demanded and increases quantity supplied until the shortage is eliminated.

Question 24

When the price of a good is higher than the equilibrium price,

A)a shortage will exist.
B)buyers desire to purchase more than is produced.
C)sellers desire to produce and sell more than buyers wish to purchase.
D)quantity demanded exceeds quantity supplied.

Question 25

If a shortage exists in a market,then we know that the actual price is

A)above the equilibrium price,and quantity supplied is greater than quantity demanded.
B)above the equilibrium price,and quantity demanded is greater than quantity supplied.
C)below the equilibrium price,and quantity demanded is greater than quantity supplied.
D)below the equilibrium price,and quantity supplied is greater than quantity demanded.

Question 26

Which of the following would cause price to decrease?

A)a decrease in supply
B)an increase in demand
C)a surplus of the good
D)a shortage of the good

Question 27

Suppose chocolate-dipped strawberries are currently selling for $30 per dozen,but the equilibrium price of chocolate-dipped strawberries is $20 per dozen.We would expect a

A)shortage to exist and the market price of chocolate-dipped strawberries to increase.
B)shortage to exist and the market price of chocolate-dipped strawberries to decrease.
C)surplus to exist and the market price of chocolate-dipped strawberries to increase.
D)surplus to exist and the market price of chocolate-dipped strawberries to decrease.

Question 28

Suppose that demand for a good decreases and,at the same time,supply of the good 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)Equilibrium quantity would decrease,but the impact on equilibrium price would be ambiguous.
D)Equilibrium quantity would increase,but the impact on equilibrium price would be ambiguous.

Question 29

Suppose roses are currently selling for $40 per dozen,but the equilibrium price of roses is $30 per dozen.We would expect a

A)shortage to exist and the market price of roses to increase.
B)shortage to exist and the market price of roses to decrease.
C)surplus to exist and the market price of roses to increase.
D)surplus to exist and the market price of roses to decrease.

Question 30

A university's football stadium is never more than half-full during football games.This indicates

A)the ticket price is above the equilibrium price.
B)the ticket price is below the equilibrium price.
C)the ticket price is at the equilibrium price.
D)nothing about the equilibrium price.

Question 31

If,at the current price,there is a shortage of a good,then

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.

Question 32

A shortage exists in a market if

A)there is an excess supply of the good.
B)quantity supplied exceeds quantity demanded.
C)the current price is below its equilibrium price.
D)All of the above are correct.

Question 33

Suppose that demand for a good increases and,at the same time,supply of the good 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)Equilibrium quantity would decrease,but the impact on equilibrium price would be ambiguous.
D)Equilibrium quantity would increase,but the impact on equilibrium price would be ambiguous.

Question 34

A university's football stadium is always sold out,and students who wait in line for hours may be turned away.This indicates

A)the ticket price is above the equilibrium price.
B)the ticket price is below the equilibrium price.
C)the ticket price is at the equilibrium price.
D)nothing about the equilibrium price.

Question 35

If,at the current price,there is a surplus of a good,then

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.

Question 36

When a surplus exists in a market,sellers

A)raise price,which increases quantity demanded and decreases quantity supplied,until the surplus is eliminated.
B)raise price,which decreases quantity demanded and increases quantity supplied,until the surplus is eliminated.
C)lower price,which increases quantity demanded and decreases quantity supplied,until the surplus is eliminated.
D)lower price,which decreases quantity demanded and increases quantity supplied,until the surplus is eliminated.

Question 37

Which of the following would cause price to increase?

A)an increase in supply
B)a decrease in demand
C)a surplus of the good
D)a shortage of the good

Question 38

If a surplus exists in a market,then we know that the actual price is

A)above the equilibrium price,and quantity supplied is greater than quantity demanded.
B)above the equilibrium price,and quantity demanded is greater than quantity supplied.
C)below the equilibrium price,and quantity demanded is greater than quantity supplied.
D)below the equilibrium price,and quantity supplied is greater than quantity demanded.

Question 39

When the price of a good is lower than the equilibrium price,

A)a surplus will exist.
B)buyers desire to purchase more than is produced.
C)sellers desire to produce and sell more than buyers wish to purchase.
D)quantity supplied exceeds quantity demanded.

Question 40

The current price of blue jeans is $30 per pair,but the equilibrium price of blue jeans is $25 per pair.As a result,

A)the quantity supplied of blue jeans exceeds the quantity demanded of blue jeans at the $30 price.
B)the equilibrium quantity of blue jeans exceeds the quantity demanded at the $30 price.
C)there is a surplus of blue jeans at the $30 price.
D)All of the above are correct.

Question 41

Figure 4-18
Refer to Figure 4-18.At a price of $35,there would be

A)a shortage,and the price would tend to rise from $35 to a higher price.
B)a surplus,and the price would tend to rise from $35 to a higher price.
C)excess demand,and the price would tend to fall from $35 to a lower price.
D)excess supply,and the price would tend to fall from $35 to a lower price.

Question 42

Figure 4-20
Refer to Figure 4-20.In this market,equilibrium price and quantity,respectively,are

A)$15 and 400 units.
B)$20 and 600 units.
C)$25 and 500 units.
D)$25 and 800 units.

Question 43

If there is a shortage of farm laborers,we would expect

A)the wage of farm laborers to increase.
B)the wage of farm laborers to decrease.
C)the price of farm commodities to decrease.
D)a decrease in the demand for substitutes for farm labor.

Question 44

Figure 4-18
Refer to Figure 4-18.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 45

Figure 4-18
Refer to Figure 4-18.At what price would there be an excess demand of 200 units of the good?

A)$15
B)$20
C)$30
D)$35

Question 46

Figure 4-18
Refer to Figure 4-18.At a price of $35,there would be a

A)shortage of 400 units.
B)surplus of 200 units.
C)surplus of 400 units.
D)surplus of 600 units.

Question 47

Years ago,thousands of country music fans risked their lives by rushing to buy tickets for a Willie Nelson concert at Carnegie Hall.This behavior indicates

A)the ticket price was above the equilibrium price.
B)the ticket price was below the equilibrium price.
C)the ticket price was at the equilibrium price.
D)nothing about the equilibrium price.

Question 48

Figure 4-18
Refer to Figure 4-18.At what price would there be an excess supply of 200 units of the good?

A)$15
B)$20
C)$30
D)$35

Question 49

Figure 4-17
Refer to Figure 4-17.At a price of

A)$2,there is a surplus of 6 units.
B)$5,there is a surplus of 25 units.
C)$5,there is a shortage of $25.
D)$7,there is a surplus of 4 units.

Question 50

Figure 4-17
Refer to Figure 4-17.At a price of

A)$2,there is a shortage of 6 units.
B)$5,there is a surplus of 25 units.
C)$5,there is a shortage of $25.
D)$7,there is a shortage of 4 units.

Question 51

Figure 4-18
Refer to Figure 4-18.At a price of $15,there would be a

A)surplus of 400 units.
B)shortage of 200 units.
C)shortage of 400 units.
D)shortage of 600 units.

Question 52

Figure 4-18
Refer to Figure 4-18.At a price of $20,there would be a(n)

A)shortage.The law of supply and demand predicts that the price will fall from $20 to a lower price.
B)surplus.The law of supply and demand predicts that the price will rise from $20 to a higher price.
C)excess demand.The law of supply and demand predicts that the price will rise from $20 to a higher price.
D)excess supply.The law of supply and demand predicts that the price will fall from $20 to a lower price.

Question 53

Figure 4-17
Refer to Figure 4-17.At a price of

A)$8,there is a surplus of 6 units.
B)$5,there is neither a shortage nor a surplus.
C)$2,there is a shortage of 6 units.
D)All of the above are correct.

Question 54

Suppose roses are currently selling for $20 per dozen,but the equilibrium price of roses is $30 per dozen.We would expect a

A)shortage to exist and the market price of roses to increase.
B)shortage to exist and the market price of roses to decrease.
C)surplus to exist and the market price of roses to increase.
D)surplus to exist and the market price of roses to decrease.

Question 55

Figure 4-20
Refer to Figure 4-20.If price is $25,then quantity demanded and quantity supplied,respectively,are

A)500 units and 500 units.
B)500 units and 800 units.
C)600 units and 600 units.
D)800 units and 500 units.

Question 56

Figure 4-19
Refer to Figure 4-19.If price in this market is currently $14,then there would be a(n)

A)surplus of 20 units.The law of supply and demand predicts that the price will rise from $14 to a higher price.
B)excess supply of 20 units.The law of supply and demand predicts that the price will fall from $14 to a lower price.
C)surplus of 40 units.The law of supply and demand predicts that the price will rise from $14 to a higher price.
D)excess supply of 40 units.The law of supply and demand predicts that the price will fall from $14 to a lower price.

Question 57

Figure 4-19
Refer to Figure 4-19.In this market,equilibrium price and quantity,respectively,are

A)$10 and 30 units.
B)$10 and 50 units.
C)$10 and 70 units.
D)$4 and 50 units.

Question 58

Figure 4-20
Refer to Figure 4-20.At a price of $20,which of the following statements is not correct?

A)The market is in equilibrium.
B)Equilibrium price is equal to equilibrium quantity.
C)There is no pressure for price to change.
D)The quantity of the good that is bought and sold is 600 units.

Question 59

Figure 4-18
Refer to Figure 4-18.Equilibrium price and quantity are,respectively,

A)$15 and 200 units.
B)$25 and 600 units.
C)$25 and 400 units.
D)$35 and 200 units.

Question 60

Figure 4-19
Refer to Figure 4-19.If there is currently a shortage of 20 units of the good,then the law of

A)demand predicts that the price will rise by $2 to eliminate the shortage.
B)supply predicts that the price will rise by $2 to eliminate the shortage.
C)supply and demand predicts that the price will rise by $2 to eliminate the shortage.
D)supply and demand predicts that the price will fall by $2 to eliminate the shortage.

Question 61

Figure 4-20
Refer to Figure 4-20.At a price of $15,

A)quantity demanded exceeds quantity supplied.
B)there is a shortage.
C)there is an excess demand.
D)All of the above are correct.

Question 62

Suppose buyers of computers and printers regard the two goods as complements.Then an increase in the price of computers will cause a(n)

A)decrease in the demand for printers and a decrease in the quantity supplied of printers.
B)decrease in the supply of printers and a decrease in the quantity demanded of printers.
C)decrease in the equilibrium price of printers and an increase in the equilibrium quantity of printers.
D)increase in the equilibrium price of printers and a decrease in the equilibrium quantity of printers.

Question 63

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.Your first step would be to

A)decide which direction to shift the curve.
B)decide whether the fires affected demand or supply.
C)graph the shift to see the effect on equilibrium.
D)None of the above is correct.

Question 64

Figure 4-21
Refer to Figure 4-21.What is the equilibrium quantity in this market?

A)2.5 units
B)5 units
C)7.5 units
D)10 units

Question 65

Figure 4-22
Refer to Figure 4-22.At a price of $8,there is a

A)surplus of 4 units.
B)surplus of 8 units.
C)shortage of 4 units.
D)shortage of 8 units.

Question 66

Figure 4-22
Refer to Figure 4-22.At a price of $24,there is a

A)surplus of 4 units.
B)surplus of 8 units.
C)shortage of 4 units.
D)shortage of 8 units.

Question 67

Figure 4-22
Refer to Figure 4-22.What is the equilibrium price in this market?

A)$8
B)$12
C)$16
D)$20

Question 68

Figure 4-22
Refer to Figure 4-22.What is the equilibrium quantity in this market?

A)4 units
B)8 units
C)12 units
D)16 units

Question 69

Figure 4-20
Refer to Figure 4-20.If the price is $10,then there would be a

A)shortage of 400 units,and price would rise.
B)surplus of 400 units,and price would rise.
C)shortage of 600 units,and price would rise.
D)surplus of 600 units,and price would rise.

Question 70

Suppose buyers of coffee and sugar regard the two goods as complements.Then an increase in the price of coffee will cause a(n)

A)decrease in the demand for sugar and a decrease in the quantity supplied of sugar.
B)decrease in the supply of sugar and a decrease in the quantity demanded of sugar.
C)decrease in the equilibrium price of sugar and an increase in the equilibrium quantity of sugar.
D)increase in the equilibrium price of sugar and a decrease in the equilibrium quantity of sugar.

Question 71

Which of the following would increase in response to a decrease in the price of ironing boards?

A)the quantity of irons demanded at each possible price of irons
B)the equilibrium quantity of irons
C)the equilibrium price of irons
D)All of the above are correct.

Question 72

Figure 4-22
Refer to Figure 4-22.At a price of $12,there is a

A)surplus of 2 units.
B)surplus of 4 units.
C)shortage of 2 units.
D)shortage of 4 units.

Question 73

Figure 4-21
Refer to Figure 4-21.At a price of $4,there is a

A)surplus of 1 unit.
B)surplus of 3 units.
C)shortage of 1 unit.
D)shortage of 3 units.

Question 74

Which of the following events must result in a higher price in the market for cigars?

A)Demand for cigars increases,and supply of cigars decreases.
B)Demand for cigars and supply of cigars both decrease.
C)Demand for cigars decreases,and supply of cigars increases.
D)Demand for cigars and supply of cigars both increase

Question 75

Figure 4-21
Refer to Figure 4-21.What is the equilibrium price in this market?

A)$0
B)$5
C)$10
D)$20

Question 76

Figure 4-22
Refer to Figure 4-22.At a price of $20,there is a

A)surplus of 4 units.
B)surplus of 8 units.
C)shortage of 4 units.
D)shortage of 8 units.

Question 77

Which of the following would increase in response to a increase in the price of ironing boards?

A)the quantity of irons demanded at each possible price of irons
B)the equilibrium quantity of irons
C)the equilibrium price of irons
D)None of the above is correct.

Question 78

Figure 4-20
Refer to Figure 4-20.If the price is $25,then there would be an excess

A)supply of 100 units,and price would fall.
B)supply of 300 units,and price would fall.
C)demand of 100 units,and price would fall.
D)demand of 300 units,and price would fall.

Question 79

Which of the following events must result in a lower price in the market for Snickers?

A)Demand for Snickers increases,and supply of Snickers decreases.
B)Demand for Snickers and supply of Snickers both decrease.
C)Demand for Snickers decreases,and supply of Snickers increases.
D)Demand for Snickers and supply of Snickers both increase

Question 80

Figure 4-21
Refer to Figure 4-21.At a price of $16,there is a

A)surplus of 1 unit.
B)surplus of 3 units.
C)shortage of 1 unit.
D)shortage of 3 units.