3.8 Changes in Market Equilibrium- Period 3

Which of the following explains what typically happens when a market is thrown into disequilibrium?

• It remains in disequilibrium until government intervenes.

• It remains in disequilibrium until producers' marginal costs increase.

• It moves toward a new equilibrium point as a result of the laws of supply and demand.

• It quickly returns to the established price floor or ceiling.

What action by the government would most likely increase the supply of gasoline in the short term?

• Reduced taxes on the refining of gasoline

• Greater regulation of gas stations

• Stricter limits on the size of oil tankers allowed in U.S. ports

• Increased purchases of electric vehicles for government use

How has the Internet dramatically reduced search costs?

• By making the shopping experience more fun.

• By eliminating the need to travel to stores to shop.

• By reducing the benefit of competition.

• By offering products for sale at prices below those in stores.

How would a bicycle producer likely react to a shortage of its product?

• By holding special clearance sales of its inventory.

• By keeping stores open longer hours.

• By raising prices and reducing supply.

• By raising prices and increasing supply.

If the cost of gasoline increases sharply and continues to rise, how does this development affect the demand curve for cars?

• The demand curve for gas-guzzlers and for fuel-efficient cars fluctuates wildly.

• The demand curve for gas-guzzlers and for fuel-efficient cars both shift to the right.

• The demand curve for gas-guzzlers shifts to the left, and the demand curve for fuel-efficient cars shifts to the right.

• The demand curve for gas-guzzlers shifts to the right, and the demand curve for fuel-efficient cars shifts to the left.