Question 1

Why does the equilibrium quantity change when there is a decrease in demand?

Accepted Answer

A)  A shortage leads to a lower price, and a higher price increases quantity supplied and decreases quantity demanded. 
B)  A surplus leads to a lower price, and a lower price increases quantity supplied and decreases quantity demanded. 
C)  A shortage leads to a higher price, and a higher price increases quantity supplied and decreases quantity demanded. 
D)  A surplus leads to a lower price, and a lower price decreases quantity supplied and increases quantity demanded. 
A)  A shortage leads to a lower price, and a higher price increases quantity supplied and decreases quantity demanded. 
B)  A surplus leads to a lower price, and a lower price increases quantity supplied and decreases quantity demanded. 
C)  A shortage leads to a higher price, and a higher price increases quantity supplied and decreases quantity demanded. 
D)  A surplus leads to a lower price, and a lower price decreases quantity supplied and increases quantity demanded.

Question 2

A tariff has been placed on sisal, a plant that is used to produce sisal rugs. Wool rugs are a substitute in consumption for sisal rugs. If the price of wool rugs increases and the effect of this is greater on the demand for sisal rugs than the impact of the tariff on supply, what happens to the equilibrium price and quantity of sisal rugs?

Accepted Answer

A)  Price increases, and quantity decreases. 
B)  Price decreases, and quantity increases. 
C)  Price increases, and quantity increases. 
D)  Price decreases, and quantity decreases. 
A)  Price increases, and quantity decreases. 
B)  Price decreases, and quantity increases. 
C)  Price increases, and quantity increases. 
D)  Price decreases, and quantity decreases.

Question 3

What happens to the price and quantity in the market for iced tea if the price of strawberry lemonade, a substitute in production, increases?

Accepted Answer

A)  Price increases, and quantity decreases. 
B)  No impact on price, and quantity increases. 
C)  Price decreases, and quantity increases. 
D)  Price increases, and quantity increases. 
A)  Price increases, and quantity decreases. 
B)  No impact on price, and quantity increases. 
C)  Price decreases, and quantity increases. 
D)  Price increases, and quantity increases.

Question 4

Use Figure: The Market for Sandwiches. What happens if the current price of sandwiches is $5?
​
Figure: The Market for Sandwiches

Accepted Answer

A)  There is a shortage. 
B)  There is a surplus. 
C)  Quantity supplied exceeds quantity demanded. 
D)  Quantity supplied equals quantity demanded. 
A)  There is a shortage. 
B)  There is a surplus. 
C)  Quantity supplied exceeds quantity demanded. 
D)  Quantity supplied equals quantity demanded.

Question 5

In the widget market, currently 100 widgets are being sold. At this quantity, consumers are willing to pay $3, and sellers are willing to accept $6. What must be true in the widget market?

Accepted Answer

A)  There is currently a surplus of widgets, and the price must rise above $6. 
B)  There is currently a surplus of widgets, and the price must fall below $6. 
C)  There is currently a shortage of widgets, and the price must rise above $6. 
D)  The market is in equilibrium. 
A)  There is currently a surplus of widgets, and the price must rise above $6. 
B)  There is currently a surplus of widgets, and the price must fall below $6. 
C)  There is currently a shortage of widgets, and the price must rise above $6. 
D)  The market is in equilibrium.

Question 6

A news story reveals that grapefruit has widespread health benefits. At the same time, a tariff is placed on imported grapefruit. If it is not known whether the impact of these changes will affect supply or demand more, what happens to equilibrium price and quantity in the market for grapefruit?

Accepted Answer

A)  Price increases, and quantity increases. 
B)  Price increases; we cannot say what happens to quantity. 
C)  Price decreases; we cannot say what happens to quantity. 
D)  We cannot say what happens to price; quantity increases. 
A)  Price increases, and quantity increases. 
B)  Price increases; we cannot say what happens to quantity. 
C)  Price decreases; we cannot say what happens to quantity. 
D)  We cannot say what happens to price; quantity increases.

Question 7

What is an import tariff?

Accepted Answer

A)  a tax on goods or services sold to other countries 
B)  a tax on goods or services bought from other countries 
C)  a per unit tax on a good or service produced and sold within a country 
D)  a tax based on the value of goods or services produced and sold within a country 
A)  a tax on goods or services sold to other countries 
B)  a tax on goods or services bought from other countries 
C)  a per unit tax on a good or service produced and sold within a country 
D)  a tax based on the value of goods or services produced and sold within a country

Question 8

Which of the following will definitely NOT occur if demand decreases and supply increases?

Accepted Answer

A)  Price increases. 
B)  Price decreases. 
C)  Quantity increases. 
D)  Quantity decreases. 
A)  Price increases. 
B)  Price decreases. 
C)  Quantity increases. 
D)  Quantity decreases.

Question 9

An increase in demand causes what changes in a market?

Accepted Answer

A)  Price increases, and quantity decreases. 
B)  Price decreases, and quantity increases. 
C)  Price increases, and quantity increases. 
D)  Price decreases, and quantity decreases. 
A)  Price increases, and quantity decreases. 
B)  Price decreases, and quantity increases. 
C)  Price increases, and quantity increases. 
D)  Price decreases, and quantity decreases.

Question 10

Which of the following causes a decrease in equilibrium price and quantity in the market for iced tea?

Accepted Answer

A)  higher temperatures that increase people's preference for iced tea 
B)  an increase in the wages at beverage stands 
C)  an increase in the taxes on iced tea sellers 
D)  higher prices for beignets, which is a complement in consumption for iced tea 
A)  higher temperatures that increase people's preference for iced tea 
B)  an increase in the wages at beverage stands 
C)  an increase in the taxes on iced tea sellers 
D)  higher prices for beignets, which is a complement in consumption for iced tea

Question 11

When the price in a market is below the equilibrium price, a _____ will exist in that market.

Accepted Answer

A)  shortage 
B)  surplus 
C)  equilibrium 
D)  balance 
A)  shortage 
B)  surplus 
C)  equilibrium 
D)  balance

Question 12

The equilibrium price in the market for lobster tails is $45 per pound. If a price of $30 is imposed on this market, this would be:

Accepted Answer

A)  an equilibrium price. 
B)  an effective price ceiling. 
C)  an effective price floor. 
D)  a rationing coupon. 
A)  an equilibrium price. 
B)  an effective price ceiling. 
C)  an effective price floor. 
D)  a rationing coupon.

Question 13

An increase in supply causes what changes in a market?

Accepted Answer

A)  Price increases, and quantity decreases. 
B)  Price decreases, and quantity increases. 
C)  Price increases, and quantity increases. 
D)  Price decreases, and quantity decreases. 
A)  Price increases, and quantity decreases. 
B)  Price decreases, and quantity increases. 
C)  Price increases, and quantity increases. 
D)  Price decreases, and quantity decreases.

Question 14

When the price in a market is above the equilibrium price, a _____ will exist in that market.

Accepted Answer

A)  shortage 
B)  surplus 
C)  equilibrium 
D)  balance 
A)  shortage 
B)  surplus 
C)  equilibrium 
D)  balance

Question 15

What happens to the equilibrium price and quantity of ricotta if the price of mozzarella, a complement in production to ricotta, increases?

Accepted Answer

A)  Price decreases, and quantity increases. 
B)  Price decreases, and quantity decreases. 
C)  Price increases, and quantity increases. 
D)  Price increases, and quantity decreases. 
A)  Price decreases, and quantity increases. 
B)  Price decreases, and quantity decreases. 
C)  Price increases, and quantity increases. 
D)  Price increases, and quantity decreases.

Question 16

Mozzarella and ricotta are complements in production. The price of mozzarella has increased, and the buyers in the market for ricotta have increased. If it is known that the effect of these changes is greater on supply than it is on demand, what is the effect on equilibrium price and quantity in the market for ricotta?

Accepted Answer

A)  Price increases, and quantity increases. 
B)  Price decreases, and quantity increases. 
C)  Price decreases, and quantity decreases. 
D)  Price increases, and quantity decreases. 
A)  Price increases, and quantity increases. 
B)  Price decreases, and quantity increases. 
C)  Price decreases, and quantity decreases. 
D)  Price increases, and quantity decreases.

Question 17

How do the price and quantity change for lawn chairs if the number of firms producing lawn chairs increases?

Accepted Answer

A)  Price increases, and quantity decreases. 
B)  Price decreases, and quantity increases. 
C)  Price decreases, and quantity decreases. 
D)  Price increases, and quantity increases. 
A)  Price increases, and quantity decreases. 
B)  Price decreases, and quantity increases. 
C)  Price decreases, and quantity decreases. 
D)  Price increases, and quantity increases.

Question 18

What is the equilibrium point?

Accepted Answer

A)  the point where the demand curve intersects the vertical axis 
B)  the point where the supply curve intersects the vertical axis 
C)  the point where the supply curve and demand curve intersect 
D)  the point where the price intersects the supply curve 
A)  the point where the demand curve intersects the vertical axis 
B)  the point where the supply curve intersects the vertical axis 
C)  the point where the supply curve and demand curve intersect 
D)  the point where the price intersects the supply curve

Why does the equilibrium quantity change when there is a decrease in demand?

What happens to the price and quantity in the market for iced tea if the price of strawberry lemonade, a substitute in production, increases?

Use Figure: The Market for Sandwiches. What happens if the current price of sandwiches is $5? Figure: The Market for Sandwiches

In the widget market, currently 100 widgets are being sold. At this quantity, consumers are willing to pay $3, and sellers are willing to accept $6. What must be true in the widget market?

A news story reveals that grapefruit has widespread health benefits. At the same time, a tariff is placed on imported grapefruit. If it is not known whether the impact of these changes will affect supply or demand more, what happens to equilibrium price and quantity in the market for grapefruit?

What is an import tariff?

Which of the following will definitely NOT occur if demand decreases and supply increases?

An increase in demand causes what changes in a market?

Which of the following causes a decrease in equilibrium price and quantity in the market for iced tea?

When the price in a market is below the equilibrium price, a _____ will exist in that market.

The equilibrium price in the market for lobster tails is $45 per pound. If a price of $30 is imposed on this market, this would be:

An increase in supply causes what changes in a market?

When the price in a market is above the equilibrium price, a _____ will exist in that market.

What happens to the equilibrium price and quantity of ricotta if the price of mozzarella, a complement in production to ricotta, increases?

How do the price and quantity change for lawn chairs if the number of firms producing lawn chairs increases?

What is the equilibrium point?

Foundations of Economics

Extension: Understanding Graphs

Markets and Economies

Demand

Supply

Elasticity

Consumer Behavior

Production Costs

Perfect Competition

Market Power

Factor Markets

Market Failure and Government Failure

Measuring an Economys Performance

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money and Banking

Monetary Policy

Economic Growth and Development

International Trade and Finance

Filters

Exam 5: Market Equilibrium

Why does the equilibrium quantity change when there is a decrease in demand?

What happens to the price and quantity in the market for iced tea if the price of strawberry lemonade, a substitute in production, increases?

Use Figure: The Market for Sandwiches. What happens if the current price of sandwiches is $5? ​ Figure: The Market for Sandwiches

In the widget market, currently 100 widgets are being sold. At this quantity, consumers are willing to pay $3, and sellers are willing to accept $6. What must be true in the widget market?

A news story reveals that grapefruit has widespread health benefits. At the same time, a tariff is placed on imported grapefruit. If it is not known whether the impact of these changes will affect supply or demand more, what happens to equilibrium price and quantity in the market for grapefruit?

What is an import tariff?

Which of the following will definitely NOT occur if demand decreases and supply increases?

An increase in demand causes what changes in a market?

Which of the following causes a decrease in equilibrium price and quantity in the market for iced tea?

When the price in a market is below the equilibrium price, a _____ will exist in that market.

The equilibrium price in the market for lobster tails is $45 per pound. If a price of $30 is imposed on this market, this would be:

An increase in supply causes what changes in a market?

When the price in a market is above the equilibrium price, a _____ will exist in that market.

What happens to the equilibrium price and quantity of ricotta if the price of mozzarella, a complement in production to ricotta, increases?

How do the price and quantity change for lawn chairs if the number of firms producing lawn chairs increases?

What is the equilibrium point?

Foundations of Economics

Extension: Understanding Graphs

Markets and Economies

Demand

Supply

Elasticity

Consumer Behavior

Production Costs

Perfect Competition

Market Power

Factor Markets

Market Failure and Government Failure

Measuring an Economys Performance

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money and Banking

Monetary Policy

Economic Growth and Development

International Trade and Finance

Filters

Use Figure: The Market for Sandwiches. What happens if the current price of sandwiches is $5? Figure: The Market for Sandwiches