Econ 9
Ch 3 Equilibrium KEY
These practice problems are not reflective of all material covered in class or the textbook.
1. 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.
ANS: D
2. 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.
ANS: B
3. 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.
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.
a.
the quantity supplied of neckties exceeds the quantity demanded of neckties at the
$30 price.
b.
the equilibrium quantity of neckties exceeds the quantity demanded at the $30
price.
c.
there is a surplus of neckties at the $30 price.
