L04 Equilibrium and Elasticity

Multiple Choice

The demand curve shows a(n) ________ relationship between price and quantity and is therefore ________ sloping.

• direct; downward

• direct; upward

• inverse; downward

• inverse; upward

Multiple Choice

All of the following are factors that will shift the supply curve except

• a change in production technology.

• changing tastes and preferences.

•  a change in the price of materials used for production.

• a change in the number of producers.

Multiple Choice

A condition in a market where quantity demanded equals quantity supplied is called

•  a shortage.

• a surplus.

• a calibrated equality.

• market equilibrium.

Multiple Choice

Assume that the graph in this figure represents the demand and supply curves for orange juice. An increase in the price of apple juice, which is a substitute for orange juice, would be represented by a shift from

• Demand 1 to Demand 2.

• Demand 2 to Demand 1.

• Supply 1 to Supply 2.

• Supply 2 to Supply 1.

Multiple Choice

If, as a consumer, Jeannine is very sensitive to changes in the price of pineapples,

• her demand is price elastic.

• her demand is price inelastic.

• her supply is price elastic.

• her supply is price inelastic.