IE 3 - Markets in Action I

Which of the following factors would shift the demand curve for electric vehicles to the right?

• A decrease in household income

• A rise in the price of batteries

• An increase in fuel prices

• A decrease in the number of buyers

What happens to the supply curve when there is an improvement in car manufacturing technology?

• It shifts to the left

• It shifts to the right

• It becomes vertical

• It remains unchanged

A decrease in the number of car manufacturers in the market will:

• Increase demand

• Shift the supply curve to the left

• Shift the demand curve to the right

• Lower consumer expectations

What does the market equilibrium represent?

• The maximum possible price for a good

• The point where supply exceeds demand

• The point where demand and supply intersect

• The point where producers make the most profit

When demand increases and supply remains constant, what is the likely impact on equilibrium price and quantity?

• Price falls, quantity decreases

• Price rises, quantity decreases

• Price falls, quantity rises

• Price rises, quantity rises

What is the producer surplus in a market?

• The benefit consumers receive when they pay less than they are willing

• The additional amount producers receive above their cost of production

• The difference between total demand and total supply

• The total cost of producing goods

If a producer is willing to sell a product for $10 but manages to sell it for $15, and if the consumer surplus is $20, find the producer surplus.

• $5

• $10

• $15

• $25

An event that reduces the quantity supplied at any price will cause:

• A rightward shift in the supply curve

• A movement along the supply curve

• A leftward shift in the supply curve

• No change in the supply curve

If consumers expect the price of a product to rise in the future, what will likely happen to current demand?

• Demand will decrease

• Demand will remain constant

• Demand will increase

• Demand will be unaffected

A tax on a product will generally result in:

• Lower consumer prices

• Increased demand

• Reduced quantity sold

• Higher producer prices