C3 : SET 4 - MARKET EQUILIBRIUM

If there is a shortage of ‘Avatar’ movie tickets, we can predict that _______________.

• the quantity of movie tickets sold and purchased are same.

• the price of the movie tickets will rise.

• the price of the movie tickets will decline.

• the quantity supplied of movie tickets is more than quantity demanded .

Subsidies given to vegetables farmers will result in _____________.

• a shift in the supply curve of vegetables.

• a shift in the demand curve for vegetables.

• a movement along the supply curve of vegetables.

• a movement along the demand curve of vegetables.

Other things being the same, we can expect the imposition of an excise tax on a product to _________________.

• decrease its supply.

• increase its price.

• decrease the quantity sold.

• do all the above.

Chicken and fish are substitutes. If the price of chicken increases, the demand for fish will_____________.

• decrease and the demand curve for fish will shift leftward.

• increase and the demand curve for fish will shift rightward.

• increase or decrease but the demand curve for chicken will not change.

• not change but there will be a movement along the demand curve.

If the ceiling price is fixed below the equilibrium price, we can predict that ___________.

• quantity demanded will decrease

• quantity demanded is equal to quantity supplied

• quantity supplied will be less than quantity demanded

• quantity supplied will be greater than quantity demanded

When excess demand occurs, there is tendency of________________.

• price to rise.

• price to fall.

• quantity demand to increase.

• quantity supplied to decrease.

If the price of a good is above the equilibrium price ___________________.

• there is a surplus and the price will fall.

• there is a surplus and the price will rise.

• there is a shortage and the price will fall.

• there is a shortage and the price will rise.

The demand and supply function for Pencils is given by Qd = 85 -5P and Supply is given by Qs = 25+ 5P where P is the price of pencils. What is the equilibrium price and quantity?

• RM6 ; 50 units

• RM6 ; 55 units

• RM5 ; 60 units

• RM5 ; 65 units

Hotdogs and buns are complements. What will happen to the equilibrium price and quantity in the market for buns if hotdogs become less expensive? The equilibrium price for buns will ___________________.

• increase and the equilibrium quantity will decrease.

• increase and the equilibrium quantity will increase.

• decrease and the equilibrium quantity will decrease.

• decrease and the equilibrium quantity will increase.

Quantity demanded is equal to quantity supplied, at the equilibrium price.

• TRUE

• FALSE