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Worksheetsch4 demand and supply
Total questions: 91
Worksheet time: 2hrs 31mins
Name
Class
Date
1.
The unique point at which the supply and demand curves intersect is called
a)
market harmony.
b)
coincidence.
c)
equivalence.
d)
equilibrium.
2.
The dictionary defines equilibrium as a situation in which forces
a)
are in balance.
b)
are the same.
c)
clash.
d)
remain constant.
3.
At the equilibrium price, the quantity of the good that buyers are willing and able to buy
a)
is greater than the quantity that sellers are willing and able to sell.
b)
exactly equals the quantity that sellers are willing and able to sell.
c)
is less than the quantity that sellers are willing and able to sell.
d)
Either a) or c) could be correct.
4.
Another term for equilibrium price is
a)
dynamic price.
b)
market-clearing price.
c)
quantity-defining price.
d)
balance price.
5.
In a given market, how are the equilibrium price and the market-clearing price related?
a)
There is no relationship.
b)
They are the same price.
c)
The market-clearing price exceeds the equilibrium price.
d)
The equilibrium price exceeds the market-clearing price.
6.
Buyers are able to buy all they want to buy and sellers are able to sell all they want to sell at
a)
prices at and above the equilibrium price.
b)
prices at and below the equilibrium price.
c)
prices above and below the equilibrium price, but not at the equilibrium price.
d)
the equilibrium price but not above or below the equilibrium price.
7.
In markets, prices move toward equilibrium because of
a)
the actions of buyers and sellers.
b)
government regulations placed on market participants.
c)
increased competition among sellers.
d)
buyers' ability to affect market outcomes.
8.
Which of the following events must cause equilibrium quantity to fall?
a)
demand increases and supply decreases
b)
demand and supply both decrease
c)
demand decreases and supply increases
d)
demand and supply both increase
9.
Which of the following events must cause equilibrium quantity to rise?
a)
demand increases and supply decreases
b)
demand and supply both decrease
c)
demand decreases and supply increases
d)
demand and supply both increase
10.
Which of the following events must cause equilibrium price to fall?
a)
demand increases and supply decreases
b)
demand and supply both decrease
c)
demand decreases and supply increases
d)
demand and supply both increase
11.
Equilibrium quantity must decrease when demand
a)
increases and supply does not change, when demand does not change and supply decreases, and when both demand and supply decrease.
b)
increases and supply does not change, when demand does not change and supply increases, and when both demand and supply decrease.
c)
decreases and supply does not change, when demand does not change and supply increases, and when both demand and supply decrease.
d)
decreases and supply does not change, when demand does not change and supply decreases, and when both demand and supply decrease.
12.
Equilibrium quantity must increase when demand
a)
increases and supply does not change, when demand does not change and supply increases, and when both demand and supply increase.
b)
increases and supply does not change, when demand does not change and supply increases, and when both demand and supply decrease.
c)
decreases and supply does not change, when demand does not change and supply decreases, and when both demand and supply increase.
d)
decreases and supply does not change, when demand does not change and supply decreases, and when both demand and supply decrease.
13.
Equilibrium price must decrease when demand
a)
increases and supply does not change, when demand does not change and supply decreases, and when demand decreases and supply increases simultaneously.
b)
increases and supply does not change, when demand does not change and supply decreases, and when demand increases and supply decreases simultaneously.
c)
decreases and supply does not change, when demand does not change and supply increases, and when demand decreases and supply increases simultaneously.
d)
decreases and supply does not change, when demand does not change and supply increases, and when demand increases and supply decreases simultaneously.
14.
Equilibrium price must increase when demand
a)
increases and supply does not change, when demand does not change and supply decreases, and when demand decreases and supply increases simultaneously.
b)
increases and supply does not change, when demand does not change and supply decreases, and when demand increases and supply decreases simultaneously.
c)
decreases and supply does not change, when demand does not change and supply increases, and when demand decreases and supply increases simultaneously.
d)
decreases and supply does not change, when demand does not change and supply increases, and when demand increases and supply decreases simultaneously.
15.
Which of the following events must cause equilibrium price to rise?
a)
demand increases and supply decreases
b)
demand and supply both decrease
c)
demand decreases and supply increases
d)
demand and supply both increase
16.
If the demand for a product increases, then we would expect equilibrium price
a)
to increase and equilibrium quantity to decrease.
b)
to decrease and equilibrium quantity to increase.
c)
and equilibrium quantity both to increase.
d)
and equilibrium quantity both to decrease.
17.
If the demand for a product decreases, then we would expect equilibrium price
a)
to increase and equilibrium quantity to decrease.
b)
to decrease and equilibrium quantity to increase.
c)
and equilibrium quantity to both increase.
d)
and equilibrium quantity to both decrease.
18.
If the supply of a product increases, then we would expect equilibrium price
a)
to increase and equilibrium quantity to decrease.
b)
to decrease and equilibrium quantity to increase.
c)
and equilibrium quantity to both increase.
d)
and equilibrium quantity to both decrease.
19.
If the supply of a product decreases, then we would expect equilibrium price
a)
to increase and equilibrium quantity to decrease.
b)
to decrease and equilibrium quantity to increase.
c)
and equilibrium quantity to both increase.
d)
and equilibrium quantity to both decrease.
20.
When supply and demand both increase, equilibrium
a)
price will increase.
b)
price will decrease.
c)
quantity may increase, decrease, or remain unchanged.
d)
price may increase, decrease, or remain unchanged.
21.
Suppose that demand for a good increases and, at the same time, supply of the good decreases. What would happen in the market for the good?
a)
Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous.
b)
Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous.
c)
Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.
d)
Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
22.
Suppose that demand for a good decreases and, at the same time, supply of the good decreases. What would happen in the market for the good?
a)
Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous.
b)
Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous.
c)
Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.
d)
Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
23.
The law of supply and demand asserts that
a)
demand curves and supply curves tend to shift to the right as time goes by.
b)
the price of a good will eventually rise in response to an excess demand for that good.
c)
when the supply curve for a good shifts, the demand curve for that good shifts in response.
d)
the equilibrium price of a good will be rising more often than it will be falling.
24.
Which of the following would cause price to decrease?
a)
a decrease in supply
b)
an increase in demand
c)
a surplus of the good
d)
a shortage of the good
25.
When the price of a good is higher than the equilibrium price,
a)
a shortage will exist.
b)
buyers desire to purchase more than is produced.
c)
sellers desire to produce and sell more than buyers wish to purchase.
d)
quantity demanded exceeds quantity supplied.
26.
A surplus exists in a market if
a)
there is an excess demand for the good.
b)
quantity demanded exceeds quantity supplied.
c)
the current price is above its equilibrium price.
d)
All of the above are correct.
27.
If a surplus exists in a market, then we know that the actual price is
a)
above the equilibrium price, and quantity supplied is greater than quantity demanded.
b)
above the equilibrium price, and quantity demanded is greater than quantity supplied.
c)
below the equilibrium price, and quantity demanded is greater than quantity supplied.
d)
below the equilibrium price, and quantity supplied is greater than quantity demanded.
28.
If, at the current price, there is a surplus of a good, then
a)
sellers are producing more than buyers wish to buy.
b)
the market must be in equilibrium.
c)
the price is below the equilibrium price.
d)
quantity demanded equals quantity supplied.
29.
When a surplus exists in a market, sellers
a)
raise price, which increases quantity demanded and decreases quantity supplied, until the surplus is eliminated.
b)
raise price, which decreases quantity demanded and increases quantity supplied, until the surplus is eliminated.
c)
lower price, which increases quantity demanded and decreases quantity supplied, until the surplus is eliminated.
d)
lower price, which decreases quantity demanded and increases quantity supplied, until the surplus is eliminated.
30.
Suppose roses are currently selling for $40 per dozen, but the equilibrium price of roses is $30 per dozen. We would expect a
a)
shortage to exist and the market price of roses to increase.
b)
shortage to exist and the market price of roses to decrease.
c)
surplus to exist and the market price of roses to increase.
d)
surplus to exist and the market price of roses to decrease.
31.
Suppose chocolate-dipped strawberries are currently selling for $30 per dozen, but the equilibrium price of chocolate-dipped strawberries is $20 per dozen. We would expect a
a)
shortage to exist and the market price of chocolate-dipped strawberries to increase.
b)
shortage to exist and the market price of chocolate-dipped strawberries to decrease.
c)
surplus to exist and the market price of chocolate-dipped strawberries to increase.
d)
surplus to exist and the market price of chocolate-dipped strawberries to decrease.
32.
The current price of blue jeans is $30 per pair, but the equilibrium price of blue jeans is $25 per pair. As a result,
a)
the quantity supplied of blue jeans exceeds the quantity demanded of blue jeans at the $30 price.
b)
the equilibrium quantity of blue jeans exceeds the quantity demanded at the $30 price.
c)
there is a surplus of blue jeans at the $30 price.
d)
All of the above are correct.
33.
A university's football stadium is never more than half-full during football games. This indicates
a)
the ticket price is above the equilibrium price.
b)
the ticket price is below the equilibrium price.
c)
the ticket price is at the equilibrium price.
d)
nothing about the equilibrium price.
34.
A university's football stadium is always sold out, and students who wait in line for hours may be turned away. This indicates
a)
the ticket price is above the equilibrium price.
b)
the ticket price is below the equilibrium price.
c)
the ticket price is at the equilibrium price.
d)
nothing about the equilibrium price.
35.
When the price of a good is lower than the equilibrium price,
a)
a surplus will exist.
b)
buyers desire to purchase more than is produced.
c)
sellers desire to produce and sell more than buyers wish to purchase.
d)
quantity supplied exceeds quantity demanded.
36.
A shortage exists in a market if
a)
there is an excess supply of the good.
b)
quantity supplied exceeds quantity demanded.
c)
the current price is below its equilibrium price.
d)
All of the above are correct.
37.
If a shortage exists in a market, then we know that the actual price is
a)
above the equilibrium price, and quantity supplied is greater than quantity demanded.
b)
above the equilibrium price, and quantity demanded is greater than quantity supplied.
c)
below the equilibrium price, and quantity demanded is greater than quantity supplied.
d)
below the equilibrium price, and quantity supplied is greater than quantity demanded.
38.
If, at the current price, there is a shortage of a good, then
a)
sellers are producing more than buyers wish to buy.
b)
the market must be in equilibrium.
c)
the price is below the equilibrium price.
d)
quantity demanded equals quantity supplied.
39.
Which of the following would cause price to increase?
a)
an increase in supply
b)
a decrease in demand
c)
a surplus of the good
d)
a shortage of the good
40.
When a shortage exists in a market, sellers
a)
raise price, which increases quantity demanded and decreases quantity supplied until the shortage is eliminated.
b)
raise price, which decreases quantity demanded and increases quantity supplied until the shortage is eliminated.
c)
lower price, which increases quantity demanded and decreases quantity supplied until the shortage is eliminated.
d)
lower price, which decreases quantity demanded and increases quantity supplied until the shortage is eliminated.
41.
If there is a shortage of farm laborers, we would expect
a)
the wage of farm laborers to increase.
b)
the wage of farm laborers to decrease.
c)
the price of farm commodities to decrease.
d)
a decrease in the demand for substitutes for farm labor.
42.
Suppose roses are currently selling for $20 per dozen, but the equilibrium price of roses is $30 per dozen. We would expect a
a)
shortage to exist and the market price of roses to increase.
b)
shortage to exist and the market price of roses to decrease.
c)
surplus to exist and the market price of roses to increase.
d)
surplus to exist and the market price of roses to decrease.
43.
Years ago, thousands of country music fans risked their lives by rushing to buy tickets for a Willie Nelson concert at Carnegie Hall. This behavior indicates
a)
the ticket price was above the equilibrium price.
b)
the ticket price was below the equilibrium price.
c)
the ticket price was at the equilibrium price.
d)
nothing about the equilibrium price.
44.
You have been asked by your economics professor to graph the market for lumber and then to analyze the change that would occur in equilibrium price as a result of recent forest fires in the west. Your first step would be to
a)
decide which direction to shift the curve.
b)
decide whether the fires affected demand or supply.
c)
graph the shift to see the effect on equilibrium.
d)
None of the above is correct.
45.
Which of the following events must result in a lower price in the market for Snickers?
a)
Demand for Snickers increases, and supply of Snickers decreases.
b)
Demand for Snickers and supply of Snickers both decrease.
c)
Demand for Snickers decreases, and supply of Snickers increases.
d)
Demand for Snickers and supply of Snickers both increase
46.
Which of the following events must result in a higher price in the market for cigars?
a)
Demand for cigars increases, and supply of cigars decreases.
b)
Demand for cigars and supply of cigars both decrease.
c)
Demand for cigars decreases, and supply of cigars increases.
d)
Demand for cigars and supply of cigars both increase
47.
Suppose buyers of computers and printers regard the two goods as complements. Then an increase in the price of computers will cause a(n)
a)
decrease in the demand for printers and a decrease in the quantity supplied of printers.
b)
decrease in the supply of printers and a decrease in the quantity demanded of printers.
c)
decrease in the equilibrium price of printers and an increase in the equilibrium quantity of printers.
d)
increase in the equilibrium price of printers and a decrease in the equilibrium quantity of printers.
48.
Suppose buyers of coffee and sugar regard the two goods as complements. Then an increase in the price of coffee will cause a(n)
a)
decrease in the demand for sugar and a decrease in the quantity supplied of sugar.
b)
decrease in the supply of sugar and a decrease in the quantity demanded of sugar.
c)
decrease in the equilibrium price of sugar and an increase in the equilibrium quantity of sugar.
d)
increase in the equilibrium price of sugar and a decrease in the equilibrium quantity of sugar.
49.
Which of the following would increase in response to a decrease in the price of ironing boards?
a)
the quantity of irons demanded at each possible price of irons
b)
the equilibrium quantity of irons
c)
the equilibrium price of irons
d)
All of the above are correct.
50.
Which of the following would increase in response to a increase in the price of ironing boards?
a)
the quantity of irons demanded at each possible price of irons
b)
the equilibrium quantity of irons
c)
the equilibrium price of irons
d)
None of the above is correct.
51.
A decrease in input costs to firms in a market will result in a(n)
a)
decrease in equilibrium price and an increase in equilibrium quantity.
b)
decrease in equilibrium price and a decrease in equilibrium quantity.
c)
increase in equilibrium price and a decrease in equilibrium quantity.
d)
increase in equilibrium price and an increase in equilibrium quantity.
52.
Suppose there is a flood in St. Louis, Missouri, that destroys several beer bottling facilities. Which of the following would not be a direct result of this event?
a)
Sellers would not be able to produce and sell as much as before at each relevant price.
b)
The supply would decrease.
c)
Buyers would not be willing to buy as much as before at each relevant price.
d)
The equilibrium price would rise.
53.
An early frost in the vineyards of Napa Valley would cause a(n)
a)
increase in the demand for wine, increasing price.
b)
increase in the supply of wine, decreasing price.
c)
decrease in the demand for wine, decreasing price.
d)
decrease in the supply of wine, increasing price.
54.
Exceptionally favorable growing conditions in the vineyards of Napa Valley would cause a(n)
a)
increase in the demand for wine, increasing price.
b)
increase in the supply of wine, decreasing price.
c)
decrease in the demand for wine, decreasing price.
d)
decrease in the supply of wine, increasing price.
55.
Suppose the number of buyers in a market increases and a technological advancement occurs also. What would we expect to happen in the market?
a)
Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous.
b)
Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous.
c)
Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.
d)
Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
56.
Suppose the number of buyers in a market decreases and a technological advancement occurs also. What would we expect to happen in the market?
a)
Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous.
b)
Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
c)
Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.
d)
None of the above is correct.
57.
Suppose the income of buyers in a market for an inferior good decreases and a technological advancement occurs also. What would we expect to happen in the market?
a)
Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous.
b)
Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
c)
Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.
d)
None of the above is correct.
58.
Suppose the incomes of buyers in a market for a particular normal good decrease and there is also a reduction in input prices. What would we expect to occur in this market?
a)
Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous.
b)
Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous.
c)
Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.
d)
Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
59.
What would happen to the equilibrium price and quantity of coffee if the wages of coffee-bean pickers fell and the price of tea fell?
a)
Price would fall, and the effect on quantity would be ambiguous.
b)
Price would rise, and the effect on quantity would be ambiguous.
c)
Quantity would fall, and the effect on price would be ambiguous.
d)
Quantity would rise, and the effect on price would be ambiguous.
60.
Which of the following events would cause both the equilibrium price and equilibrium quantity of number two grade potatoes to increase if number two grade potatoes are an inferior good?
a)
an increase in consumer income
b)
a decrease in consumer income
c)
greater government restrictions on agricultural chemicals
d)
fewer government restrictions on agricultural chemicals
61.
Beef is a normal good. You observe that both the equilibrium price and quantity of beef have fallen over time. Which of the following explanations would be most consistent with this observation?
a)
Consumers have experienced an increase in income, and beef-production technology has improved.
b)
The price of chicken has risen, and the price of steak sauce has fallen.
c)
New medical evidence has been released that indicates a negative correlation between a person's beef consumption and life expectancy.
d)
The demand curve for beef must be positively sloped.
62.
During the last few decades in the United States, health officials have argued that eating too much beef might be harmful to human health. As a result, there has been a significant decrease in the amount of beef produced. Which of the following best explains the decrease in production?
a)
Beef producers, concerned about the health of their customers, decided to produce relatively less beef.
b)
Government officials, concerned about consumer health, ordered beef producers to produce relatively less beef.
c)
Individual consumers, concerned about their own health, decreased their demand for beef, which lowered the equilibrium price of beef, making it less attractive to produce.
d)
Anti-beef protesters have made it difficult for both buyers and sellers of beef to meet in the marketplace.
63.
Which of the following events would unambiguously cause a decrease in the equilibrium price of cotton shirts?
a)
an increase in the price of wool shirts and a decrease in the price of raw cotton
b)
a decrease in the price of wool shirts and a decrease in the price of raw cotton
c)
an increase in the price of wool shirts and an increase in the price of raw cotton
d)
a decrease in the price of wool shirts and an increase in the price of raw cotton
64.
Which of the following events would unambiguously cause an increase in the equilibrium price of cotton shirts?
a)
an increase in the price of wool shirts and a decrease in the price of raw cotton
b)
a decrease in the price of wool shirts and a decrease in the price of raw cotton
c)
an increase in the price of wool shirts and an increase in the price of raw cotton
d)
a decrease in the price of wool shirts and an increase in the price of raw cotton
65.
Which of the following events would cause the price of oranges to fall?
a)
There is a shortage of oranges.
b)
The FDA announces that bananas cause strokes, and oranges and bananas are substitutes.
c)
The price of land throughout Florida decreases, and Florida produces a significant proportion of the nation's oranges.
d)
All of the above are correct.
66.
What would happen to the equilibrium price and quantity of lattés if consumers' incomes rise and lattés are a normal good?
a)
Both the equilibrium price and quantity would increase.
b)
Both the equilibrium price and quantity would decrease.
c)
The equilibrium price would increase, and the equilibrium quantity would decrease.
d)
The equilibrium price would decrease, and the equilibrium quantity would increase.
67.
If macaroni and cheese is an inferior good, what would happen to the equilibrium price and quantity of macaroni and cheese if consumers' incomes rise?
a)
Both the equilibrium price and quantity would increase.
b)
Both the equilibrium price and quantity would decrease.
c)
The equilibrium price would increase, and the equilibrium quantity would decrease.
d)
The equilibrium price would decrease, and the equilibrium quantity would increase.
68.
If consumers often purchase muffins to eat while they drink their lattés at local coffee shops, what would happen to the equilibrium price and quantity of lattés if the price of muffins rises?
a)
Both the equilibrium price and quantity would increase.
b)
Both the equilibrium price and quantity would decrease.
c)
The equilibrium price would increase, and the equilibrium quantity would decrease.
d)
The equilibrium price would decrease, and the equilibrium quantity would increase.
69.
If consumers often purchase muffins to eat while they drink their lattés at local coffee shops, what would happen to the equilibrium price and quantity of lattés if the price of muffins falls?
a)
Both the equilibrium price and quantity would increase.
b)
Both the equilibrium price and quantity would decrease.
c)
The equilibrium price would increase, and the equilibrium quantity would decrease.
d)
The equilibrium price would decrease, and the equilibrium quantity would increase.
70.
If consumers view cappuccinos and lattés as substitutes, what would happen to the equilibrium price and quantity of lattés if the price of cappuccinos rises?
a)
Both the equilibrium price and quantity would increase.
b)
Both the equilibrium price and quantity would decrease.
c)
The equilibrium price would increase, and the equilibrium quantity would decrease.
d)
The equilibrium price would decrease, and the equilibrium quantity would increase.
71.
If consumers view cappuccinos and lattés as substitutes, what would happen to the equilibrium price and quantity of lattés if the price of cappuccinos falls?
a)
Both the equilibrium price and quantity would increase.
b)
Both the equilibrium price and quantity would decrease.
c)
The equilibrium price would increase, and the equilibrium quantity would decrease.
d)
The equilibrium price would decrease, and the equilibrium quantity would increase.
72.
If scientists discover that steamed milk, which is used to make lattés, prevents heart attacks, what would happen to the equilibrium price and quantity of lattés?
a)
Both the equilibrium price and quantity would increase.
b)
Both the equilibrium price and quantity would decrease.
c)
The equilibrium price would increase, and the equilibrium quantity would decrease.
d)
The equilibrium price would decrease, and the equilibrium quantity would increase.
73.
What would happen to the equilibrium price and quantity of lattés if the cost of producing steamed milk, which is used to make lattés, rises?
a)
Both the equilibrium price and quantity would increase.
b)
Both the equilibrium price and quantity would decrease.
c)
The equilibrium price would increase, and the equilibrium quantity would decrease.
d)
The equilibrium price would decrease, and the equilibrium quantity would increase.
74.
What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount of labor necessary to produce them?
a)
Both the equilibrium price and quantity would increase.
b)
Both the equilibrium price and quantity would decrease.
c)
The equilibrium price would increase, and the equilibrium quantity would decrease.
d)
The equilibrium price would decrease, and the equilibrium quantity would increase.
75.
Saddle shoes are not popular right now, so very few are being produced. If saddle shoes become popular, then how will this affect the market for saddle shoes?
a)
The supply curve for saddle shoes will shift right, which will create a shortage at the current price. Price will increase, which will decrease quantity demanded and increase quantity supplied. The new market equilibrium will be at a higher price and higher quantity.
b)
The supply curve for saddle shoes will shift right, which will create a surplus at the current price. Price will decrease, which will increase quantity demanded and decrease quantity supplied. The new market equilibrium will be at a lower price and higher quantity.
c)
The demand curve for saddle shoes will shift right, which will create a shortage at the current price. Price will increase, which will decrease quantity demanded and increase quantity supplied. The new market equilibrium will be at a higher price and higher quantity.
d)
The demand curve for saddle shoes will shift right, which will create a surplus at the current price. Price will decrease, which will increase quantity demanded and decrease quantity supplied. The new market equilibrium will be at a lower price and higher quantity.
76.
The market for diamond rings is closely linked to the market for high-quality diamonds. If a large quantity of high-quality diamonds enters the market, then the
a)
supply curve for diamond rings will shift right, which will create a shortage at the current price. Price will increase, which will decrease quantity demanded and increase quantity supplied. The new market equilibrium will be at a higher price and higher quantity.
b)
supply curve for diamond rings will shift right, which will create a surplus at the current price. Price will decrease, which will increase quantity demanded and decrease quantity supplied. The new market equilibrium will be at a lower price and higher quantity.
c)
demand curve for diamond rings will shift right, which will create a shortage at the current price. Price will increase, which will decrease quantity demanded and increase quantity supplied. The new market equilibrium will be at a higher price and higher quantity.
d)
demand curve for diamond rings will shift right, which will create a surplus at the current price. Price will decrease, which will increase quantity demanded and decrease quantity supplied. The new market equilibrium will be at a lower price and higher quantity.
77.
Music compact discs are normal goods. What will happen to the equilibrium price and quantity of music compact discs if musicians accept lower royalties, compact disc players become cheaper, more firms start producing music compact discs, and music lovers experience an increase in income?
a)
Price will fall, and the effect on quantity is ambiguous.
b)
Price will rise, and the effect on quantity is ambiguous.
c)
Quantity will fall, and the effect on price is ambiguous.
d)
Quantity will rise, and the effect on price is ambiguous.
78.
What will happen to the equilibrium price of new textbooks if more students attend college, paper becomes cheaper, textbook authors accept lower royalties, and fewer used textbooks are sold?
a)
Price will rise.
b)
Price will fall.
c)
Price will stay exactly the same.
d)
The price change will be ambiguous.
79.
New oak tables are normal goods. What would happen to the equilibrium price and quantity in the market for oak tables if the price of maple tables rises, the price of oak wood rises, more buyers enter the market for oak tables, and the price of the glue used in the production of the new oak tables increased?
a)
Price will fall, and the effect on quantity is ambiguous.
b)
Price will rise, and the effect on quantity is ambiguous.
c)
Quantity will fall, and the effect on price is ambiguous.
d)
Quantity will rise, and the effect on price is ambiguous.
80.
What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts went up, the price of jelly fell, fewer firms decided to produce peanut butter, and health officials announced that eating peanut butter was good for you?
a)
Price will fall, and the effect on quantity is ambiguous.
b)
Price will rise, and the effect on quantity is ambiguous.
c)
Quantity will fall, and the effect on price is ambiguous.
d)
Quantity will rise, and the effect on price is ambiguous.
81.
Pens are normal goods. What will happen to the equilibrium price of pens if the price of pencils rises, consumers experience an increase in income, writing in ink becomes fashionable, people expect the price of pens to rise in the near future, the population increases, fewer firms manufacture pens, and the wages of pen-makers increase?
a)
Price will rise.
b)
Price will fall.
c)
Price will stay exactly the same.
d)
The price change will be ambiguous.
82.
What will happen to the equilibrium price and quantity of traditional camera film if traditional cameras become more expensive, digital cameras become cheaper, the cost of the resources needed to manufacture traditional film falls, and more firms decide to manufacture traditional film?
a)
Price will fall, and the effect on quantity is ambiguous.
b)
Price will rise, and the effect on quantity is ambiguous.
c)
Quantity will fall, and the effect on price is ambiguous.
d)
Quantity will rise, and the effect on price is ambiguous.
83.
New cars are normal goods. What will happen to the equilibrium price of new cars if the price of gasoline rises, the price of steel falls, public transportation becomes cheaper and more comfortable, auto-workers accept lower wages, and automobile insurance becomes more expensive?
a)
Price will rise.
b)
Price will fall.
c)
Price will stay exactly the same.
d)
The price change will be ambiguous.
84.
What will happen to the equilibrium price and quantity of new cars if the price of gasoline rises, the price of steel rises, public transportation becomes cheaper and more comfortable, and auto-workers negotiate higher wages?
a)
Price will fall, and the effect on quantity is ambiguous.
b)
Price will rise, and the effect on quantity is ambiguous.
c)
Quantity will fall, and the effect on price is ambiguous.
d)
Quantity will rise, and the effect on price is ambiguous.
85.
Consider the market for new DVDs. If DVD players became cheaper, buyers expected DVD prices to fall next year, used DVDs became more expensive, and DVD production technology improved, then the equilibrium price of a new DVD would
a)
rise.
b)
fall.
c)
stay the same.
d)
could rise, fall, or remain unchanged.
86.
Which of the following sets of events must cause an increase in the price of a new house?
a)
higher wages for carpenters, higher wood prices, increases in consumer incomes, higher apartment rents, increases in population, and expectations of higher house prices in the future
b)
lower wages for carpenters, lower wood prices, increases in consumer incomes, higher apartment rents, increases in population and expectations of higher house prices in the future
c)
lower wages for carpenters, higher wood prices, decreases in consumer incomes, higher apartment rents, decreases in population and expectations of higher house prices in the future
d)
higher wages for carpenters, lower wood prices, decreases in consumer incomes, lower apartment rents, decreases in population and expectations of lower house prices in the future
87.
What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount of labor necessary to produce steamed milk, which is used to make lattés, and scientists discovered that coffee prevents heart attacks?
a)
Both the equilibrium price and quantity would increase.
b)
Both the equilibrium price and quantity would decrease.
c)
The equilibrium price would increase, and the effect on equilibrium quantity would be ambiguous.
d)
The equilibrium quantity would increase, and the effect on equilibrium price would be ambiguous.
88.
What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount of labor necessary to produce steamed milk, which is used to make lattés, and scientists discovered that lattés cause heart attacks?
a)
Both the equilibrium price and quantity would increase.
b)
Both the equilibrium price and quantity would decrease.
c)
The equilibrium price would decrease, and the effect on equilibrium quantity would be ambiguous.
d)
The equilibrium quantity would decrease, and the effect on equilibrium price would be ambiguous.
89.
What would happen to the equilibrium price and quantity of lattés if the cost to produce steamed milk, which is used to make lattés, increased, and scientists discovered that lattés cause heart attacks?
a)
Both the equilibrium price and quantity would increase.
b)
Both the equilibrium price and quantity would decrease.
c)
The equilibrium price would decrease, and the effect on equilibrium quantity would be ambiguous.
d)
The equilibrium quantity would decrease, and the effect on equilibrium price would be ambiguous.
90.
Consider the market for portable air conditioners in equilibrium. When a heat wave strikes the equilibrium price
a)
and quantity both decrease.
b)
and quantity both increase.
c)
increases, and the equilibrium quantity decreases.
d)
decreases, and the equilibrium quantity increases.
91.
Consider the market for portable air conditioners in equilibrium. A summer of unseasonably cool weather would cause
a)
both the equilibrium price and quantity to decrease.
b)
both the equilibrium price and quantity to increase.
c)
the equilibrium price to increase and the equilibrium quantity to decrease.
d)
the equilibrium price to decrease and the equilibrium quantity to increase.
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