Economics: The Basics 1st Edition by Mike Mandel

Exercise 3

Say whether each of the following statements is true or false.
a) A market has excess demand if the quantity supplied exceeds the quantity demanded.
b) The automobile market has excess supply if potential buyers have to wait several months for the car they want.
c) Excess supply in the air travel market will likely lead to lower prices for airplane tickets.
d) If the market for toothbrushes is at equilibrium, the quantity of toothbrushes demanded exceeds the quantity supplied.
e) The market equilibrium comes at the point where the supply curve intersects the demand curve.
f) A sudden discovery of a gold mine in Florida would mean a rightward shift in the supply curve for gold.
g) An explosion which destroys a fireworks factory would mean a rightward shift in the supply curve for fireworks.
h) A shift in the demand curve for cell phones would lead to a movement along the supply curve for cell phones.
i) Opening new factories for shirts in Thailand results in a movement along the supply curve for shirts.
j) Yachts are likely to be a normal good.