SL9_T2_Demand, Supply & Equilibrium

What is the equilibrium price in the market for coffee?

• $4 per pound
• $6 per pound
• $7 per pound
• $8 per pound

What happens to the price when there is a surplus in the market?

• Price rises
• Price falls
• Price remains the same
• Price fluctuates wildly

Which of the following would cause an increase in demand for coffee?

• A decrease in coffee prices
• An increase in the price of tea
• A decrease in population
• A decrease in income

What is a shortage?

• When quantity supplied exceeds quantity demanded
• When quantity demanded exceeds quantity supplied
• When supply equals demand
• When prices are too high

If the supply curve shifts to the left, what is the likely effect on equilibrium price?

• It will rise
• It will fall
• It will remain unchanged
• It will fluctuate

What does a downward-sloping demand curve indicate?

• As price increases, quantity demanded increases
• As price decreases, quantity demanded decreases
• As price increases, quantity demanded decreases
• Price and quantity demanded are unrelated

In the circular flow model, what do households supply to firms?

• Goods and services
• Labor, capital, and natural resources
• Money
• Products

What occurs when both demand and supply curves shift simultaneously?

• The equilibrium price and quantity are both predictable
• The effect on equilibrium price is ambiguous
• The equilibrium quantity remains unchanged
• Only one curve affects the equilibrium

If demand decreases while supply remains constant, what happens to equilibrium quantity?

• It increases
• It decreases
• It remains the same
• It fluctuates

Which of the following is NOT a demand shifter?

• Change in consumer preferences
• Change in income
• Change in production costs
• Change in the price of substitutes