Supply and Demand Day 2

What does this graph show?

• Shortage
• Surplus
• Supply Table
• Equilibrium

What is the Equilibrium Price?

• 1
• 2
• 3
• 4

The diagram represents a(n)

• increase in supply
• decrease in supply
• change in quantity supplied
• none of the above

The United States imports many cars from Japan. Suppose that the price of material(s) that Japan uses in making cars declines. What is the INITIAL (first) effect this will have on the Japanese car manufacturers?

• The input costs of Japanese made cars to the US will increase 
• The quantity supply of Japanese made cars sold in the US will decrease 
• The input costs of Japanese made cars in the US will decrease 
• The quantity demand of Japanese made cars sold in the US will decrease

Americans revive their love of SUV’s and the newly remodeled, but still “gas guzzling” Hummer. What happens to the market for gasoline?

• Demand for gasoline will decrease 
• Demand for gasoline will increase
• Demand for gasoline will stay the same

Due to a disappointing economy, Americans are cutting back on the family vacation road trips. What happens to the market for gasoline?

• Demand for gasoline will decrease 
• Demand for gasoline will increase
• Demand for gasoline will stay the same

Costs of producing gasoline has increased due to rising energy costs. What happens to the market for gasoline?

• Supply for gasoline will decrease 
• Supply for gasoline will increase
• Supply for gasoline will stay the same

The Law of Demand says that price and quantity have a(n)

• direct relationship
• inverse relationship
• marginal utility
• diminishing utility

Assume the image is showing the market for apples.  Which of the headlines could indicate the pictured shift is occurring in the market?

• Pesticides on apples linked to mouth cancer.
• Storms destroy apple orchards.
• An apple a day really does keep the doctor away.
• New genetic strain leads to apple trees that produce twice as many apples.

Graph shows which of the following?
(actually use this graph to answer the question)

• a decrease in demand (shift) and a decrease in quantity supplied
• a decrease in demand (shift) and a decrease in supply
• a decrease in quantity demanded and a decrease in quantity supplied
• a decrease in quantity demanded and a decrease in supply (shift)