Exam 4: Equilibrium- How Supply and Demand

Suppose that a market is characterized as follows: consumers are willing and able to purchase 100 units and sellers are willing and able to sell 70 units.Which of the following statements are true?

For suppliers to sell more than the equilibrium quantity,it would mean that:

In a free market equilibrium,prices and quantities are uniquely:

If the demand increases,what happens with the supply curve?

In the market for a normal good,an increase in income will cause an increase in ______,an increase in quantity ______,and a(n)______ in price.

Five new sellers enter a market (that previously had seven)and begin producing a good.Which of the following choices explains what happens to the equilibrium Q and P?

When there is a shortage,sellers have an incentive to ______ their price and buyers have an incentive to offer a ______ price.

If the equilibrium quantity in a market is 200,resources will be wasted and society made poorer if 250 units are produced.

Use the following to answer questions Figure: Price and Quantity 3 -Before his pioneering experiments on market equilibrium,Vernon Smith believed that the market equilibrium concept:

The yearly shortage of Super Bowl tickets implies that the price of Super Bowl tickets is:

Use the following to answer questions Figure: Basic Supply and Demand -(Figure: Basic Supply and Demand)In the diagram,if the market price is $2,then there is a:

In a free market equilibrium,the gains from trade are always greater for consumers than for producers.

What can cause both equilibrium price and quantity to increase?

Gains from trade will be maximized at the free market equilibrium price and quantity because the supply of goods is:

It costs suppliers $1 to produce each additional widget,and widgets sell for $2.Some consumers are not willing to pay $2 for a widget but are nevertheless willing to pay more than $1.Which of the following statements is TRUE?

Use the following to answer questions Figure: Price and Quantity 1 -(Figure: Price and Quantity 1)In the diagram,at which price is quantity demanded equal to the quantity supplied?

There is no difference between saying that there is a change in supply and in saying there is a change in the quantity supplied.

The equilibrium quantity is the quantity at which:

If the market price is above the equilibrium price,which of the following will occur?

Use the following to answer questions Figure: Price and Quantity 2 -(Figure: Price and Quantity 2)At a cost of $20 per unit in the diagram,the demanders whose wants are satisfied are represented by the section of the demand curve between a price of: