Question 1

Why does the equilibrium quantity change when there is a decrease in demand?

Accepted Answer

A)   A shortage leads to a lower price, and a higher price increases quantity supplied and decreases quantity demanded.
B)   A surplus leads to a lower price, and a lower price increases quantity supplied and decreases quantity demanded.
C)   A shortage leads to a higher price, and a higher price increases quantity supplied and decreases quantity demanded.
D)   A surplus leads to a lower price, and a lower price decreases quantity supplied and increases quantity demanded.E) None of the above
F) A) and D)

Question 2

When the price in a market is above the equilibrium price, a _____ will exist in that market.

Accepted Answer

A)   shortage
B)   surplus
C)   equilibrium
D)   balanceE) B) and C)
F) A) and D)

Question 3

An increase in demand causes what changes in a market?

Accepted Answer

A)   Price increases, and quantity decreases.
B)   Price decreases, and quantity increases.
C)   Price increases, and quantity increases.
D)   Price decreases, and quantity decreases.E) All of the above
F) C) and D)

Question 4

The equilibrium price in the market for lobster tails is $45 per pound. If a price of $30 is imposed on this market, this would be:

Accepted Answer

A)   an equilibrium price.
B)   an effective price ceiling.
C)   an effective price floor.
D)   a rationing coupon.E) B) and C)
F) A) and B)

Question 5

Which of the following causes a decrease in equilibrium price and quantity in the market for iced tea?

Accepted Answer

A)   higher temperatures that increase people's preference for iced tea
B)   an increase in the wages at beverage stands
C)   an increase in the taxes on iced tea sellers
D)   higher prices for beignets, which is a complement in consumption for iced teaE) A) and B)
F) A) and C)

Question 6

An increase in supply causes what changes in a market?

Accepted Answer

A)   Price increases, and quantity decreases.
B)   Price decreases, and quantity increases.
C)   Price increases, and quantity increases.
D)   Price decreases, and quantity decreases.E) B) and C)
F) All of the above

Question 7

A tariff has been placed on sisal, a plant that is used to produce sisal rugs. Wool rugs are a substitute in consumption for sisal rugs. If the price of wool rugs increases and the effect of this is greater on the demand for sisal rugs than the impact of the tariff on supply, what happens to the equilibrium price and quantity of sisal rugs?

Accepted Answer

A)   Price increases, and quantity decreases.
B)   Price decreases, and quantity increases.
C)   Price increases, and quantity increases.
D)   Price decreases, and quantity decreases.E) B) and C)
F) All of the above

Question 8

What is an import tariff?

Accepted Answer

A)   a tax on goods or services sold to other countries
B)   a tax on goods or services bought from other countries
C)   a per unit tax on a good or service produced and sold within a country
D)   a tax based on the value of goods or services produced and sold within a countryE) A) and D)
F) B) and D)

Question 9

In the widget market, currently 100 widgets are being sold. At this quantity, consumers are willing to pay $3, and sellers are willing to accept $6. What must be true in the widget market?

Accepted Answer

A)   There is currently a surplus of widgets, and the price must rise above $6.
B)   There is currently a surplus of widgets, and the price must fall below $6.
C)   There is currently a shortage of widgets, and the price must rise above $6.
D)   The market is in equilibrium.E) A) and B)
F) A) and C)

Question 10

Mozzarella and ricotta are complements in production. The price of mozzarella has increased, and the buyers in the market for ricotta have increased. If it is known that the effect of these changes is greater on supply than it is on demand, what is the effect on equilibrium price and quantity in the market for ricotta?

Accepted Answer

A)   Price increases, and quantity increases.
B)   Price decreases, and quantity increases.
C)   Price decreases, and quantity decreases.
D)   Price increases, and quantity decreases.E) A) and B)
F) A) and C)

Question 11

When the price in a market is below the equilibrium price, a _____ will exist in that market.

Accepted Answer

A)   shortage
B)   surplus
C)   equilibrium
D)   balanceE) A) and B)
F) A) and C)

Question 12

What happens to the equilibrium price and quantity of ricotta if the price of mozzarella, a complement in production to ricotta, increases?

Accepted Answer

A)   Price decreases, and quantity increases.
B)   Price decreases, and quantity decreases.
C)   Price increases, and quantity increases.
D)   Price increases, and quantity decreases.E) C) and D)
F) B) and C)

Question 13

A news story reveals that grapefruit has widespread health benefits. At the same time, a tariff is placed on imported grapefruit. If it is not known whether the impact of these changes will affect supply or demand more, what happens to equilibrium price and quantity in the market for grapefruit?

Accepted Answer

A)   Price increases, and quantity increases.
B)   Price increases; we cannot say what happens to quantity.
C)   Price decreases; we cannot say what happens to quantity.
D)   We cannot say what happens to price; quantity increases.E) A) and B)
F) A) and C)

Question 14

What happens to the price and quantity in the market for iced tea if the price of strawberry lemonade, a substitute in production, increases?

Accepted Answer

A)   Price increases, and quantity decreases.
B)   No impact on price, and quantity increases.
C)   Price decreases, and quantity increases.
D)   Price increases, and quantity increases.E) B) and C)
F) B) and D)

Question 15

Use Figure: The Market for Sandwiches. What happens if the current price of sandwiches is $5?
​
Figure: The Market for Sandwiches

Accepted Answer

A)   There is a shortage.
B)   There is a surplus.
C)   Quantity supplied exceeds quantity demanded.
D)   Quantity supplied equals quantity demanded.E) A) and B)
F) B) and D)

Question 16

What is the equilibrium point?

Accepted Answer

A)   the point where the demand curve intersects the vertical axis
B)   the point where the supply curve intersects the vertical axis
C)   the point where the supply curve and demand curve intersect
D)   the point where the price intersects the supply curveE) B) and C)
F) A) and D)

Question 17

Which of the following will definitely NOT occur if demand decreases and supply increases?

Accepted Answer

A)   Price increases.
B)   Price decreases.
C)   Quantity increases.
D)   Quantity decreases.E) None of the above
F) A) and C)

Question 18

How do the price and quantity change for lawn chairs if the number of firms producing lawn chairs increases?

Accepted Answer

A)   Price increases, and quantity decreases.
B)   Price decreases, and quantity increases.
C)   Price decreases, and quantity decreases.
D)   Price increases, and quantity increases.E) A) and B)
F) A) and D)

Exam 5: Market Equilibrium

In the widget market, currently 100 widgets are being sold. At this quantity, consumers are willing to pay $3, and sellers are willing to accept $6. What must be true in the widget market?

Correct Answer
verified

A news story reveals that grapefruit has widespread health benefits. At the same time, a tariff is placed on imported grapefruit. If it is not known whether the impact of these changes will affect supply or demand more, what happens to equilibrium price and quantity in the market for grapefruit?

Correct Answer
verified

An increase in supply causes what changes in a market?

Correct Answer
verified

Use Figure: The Market for Sandwiches. What happens if the current price of sandwiches is $5? Figure: The Market for Sandwiches

Correct Answer
verified

What happens to the price and quantity in the market for iced tea if the price of strawberry lemonade, a substitute in production, increases?

Correct Answer
verified

What happens to the equilibrium price and quantity of ricotta if the price of mozzarella, a complement in production to ricotta, increases?

Correct Answer
verified

Correct Answer
verified

What is an import tariff?

Correct Answer
verified

The equilibrium price in the market for lobster tails is $45 per pound. If a price of $30 is imposed on this market, this would be:

Correct Answer
verified

Why does the equilibrium quantity change when there is a decrease in demand?

Correct Answer
verified

What is the equilibrium point?

Correct Answer
verified

When the price in a market is below the equilibrium price, a _____ will exist in that market.

Correct Answer
verified

How do the price and quantity change for lawn chairs if the number of firms producing lawn chairs increases?

Correct Answer
verified

An increase in demand causes what changes in a market?

Correct Answer
verified

When the price in a market is above the equilibrium price, a _____ will exist in that market.

Correct Answer
verified

Correct Answer
verified

Which of the following causes a decrease in equilibrium price and quantity in the market for iced tea?

Correct Answer
verified

Which of the following will definitely NOT occur if demand decreases and supply increases?

Correct Answer
verified

Exam 5: Market Equilibrium

In the widget market, currently 100 widgets are being sold. At this quantity, consumers are willing to pay $3, and sellers are willing to accept $6. What must be true in the widget market?

Correct AnswerverifiedShow Answer

A news story reveals that grapefruit has widespread health benefits. At the same time, a tariff is placed on imported grapefruit. If it is not known whether the impact of these changes will affect supply or demand more, what happens to equilibrium price and quantity in the market for grapefruit?

Correct AnswerverifiedShow Answer

An increase in supply causes what changes in a market?

Correct AnswerverifiedShow Answer

Use Figure: The Market for Sandwiches. What happens if the current price of sandwiches is $5? ​ Figure: The Market for Sandwiches

Correct AnswerverifiedShow Answer

What happens to the price and quantity in the market for iced tea if the price of strawberry lemonade, a substitute in production, increases?

Correct AnswerverifiedShow Answer

What happens to the equilibrium price and quantity of ricotta if the price of mozzarella, a complement in production to ricotta, increases?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

What is an import tariff?

Correct AnswerverifiedShow Answer

The equilibrium price in the market for lobster tails is $45 per pound. If a price of $30 is imposed on this market, this would be:

Correct AnswerverifiedShow Answer

Why does the equilibrium quantity change when there is a decrease in demand?

Correct AnswerverifiedShow Answer

What is the equilibrium point?

Correct AnswerverifiedShow Answer

When the price in a market is below the equilibrium price, a _____ will exist in that market.

Correct AnswerverifiedShow Answer

How do the price and quantity change for lawn chairs if the number of firms producing lawn chairs increases?

Correct AnswerverifiedShow Answer

An increase in demand causes what changes in a market?

Correct AnswerverifiedShow Answer

When the price in a market is above the equilibrium price, a _____ will exist in that market.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following causes a decrease in equilibrium price and quantity in the market for iced tea?

Correct AnswerverifiedShow Answer

Which of the following will definitely NOT occur if demand decreases and supply increases?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Use Figure: The Market for Sandwiches. What happens if the current price of sandwiches is $5? Figure: The Market for Sandwiches

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified