Market Equilibrium Questions

Incomes of Lake County Increase.

The market for bus rides (an inferior good) we would expect:

• The demand curve to shift to the left

• The demand curve to shift to the right.

• The supply curve to shift upwards.

• The supply curve to shift downwards.

• Neither the supply nor the demand curve shifts.

As a result of the increase in income, we should expect to see that price will ________________ and quantity will _______________in the new equilibrium in the market for bus rides (bus rides are considered an inferior good)..

• decrease – increase

• increase – increase

• increase – be uncertain

• decrease – decrease

• increase – decrease

The price of computer memory chips increases.

In the market for COMPUTERS, we would expect to see:

• The demand curve to shift to the left

• The demand curve to shift to the right.

• The supply curve to shift to the right

• The supply curve to shift to the left

• Neither the supply nor the demand curve shifts.

The price of computer memory chips increases. In the market for COMPUTERS,

we would expect price will___________ and quantity will_________________in the new equilibrium.

• increase – decrease

• increase – increase

• decrease – increase

• decrease – decrease

• increase – be uncertain

Tea and coffee are substitutes.

As a result of

1./ The simultaneous increase in the price of tea.

2./The drop in the cost of production of coffee,

We would expect that price of coffee will __________and the quantity of coffee will ______________ in the new equilibrium.

• increase.-be uncertain

• decrease – decrease

• decrease – increase

• be uncertain – increase

• increase – increase

We consider : Coffee & Half-and-half milk are complement products.

1./ Coffee: Wages of workers who pick coffee rise.

2./ At the same time, the price of half-and-half milk decreases.

In the market for coffee, we should expect to see curves shift:

The supply curve will --- and the demand curve will ---.

• shift to the left– shift to the left

• shift to the left – shift to the right

• shift to the right – remain unchanged

• shift to the right – shift to the left

• shift to the right – shift to the right

As a result of the simultaneous rise in the wages of coffee workers and fall in the price of half-and-half, we would expect that price of coffee will -- and the quantity of coffee will --- in the new equilibrium.

• goes up – be uncertain

• goes up – shift to the right

• goes up – shift to the left

• goes down – shift to the right

• goes down – be uncertain