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Name: __________________________ Date: _____________
1.
The market for corn in Kansas is considered to be competitive. This means there are
_____ buyers and _____ sellers of corn in Kansas.
A)
many; few
B)
few; many
C)
many; many
D)
few; few
2.
The law of demand states that, other things equal, as the price:
A)
increases, the quantity demanded will increase.
B)
decreases, the demand curve will shift to the right.
C)
increases, demand will decrease.
D)
increases, the quantity demanded will decrease.
3.
A negative relationship between quantity demanded and price is called the law of:
A)
demand.
B)
increasing returns.
C)
market clearing.
D)
supply.
4.
Which statement illustrates the law of demand?
A)
An increase in tuition encourages more students to enroll in college because the
quality of education has risen.
B)
Consumers buy more personal computers because prices have fallen.
C)
Oil companies drill for new sources because prices are higher.
D)
Fewer people play golf because incomes are lower.
5.
_____ illustrates an inverse relationship between price and quantity.
A)
A demand curve
B)
A supply curve
C)
A production possibility frontier
D)
Equilibrium
6.
A negative relationship between the quantity demanded and price is called the law of:
A)
demand.
B)
marginality.
C)
efficiency.
D)
supply.
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7.
The law of demand is illustrated by a demand curve that is:
A)
horizontal.
B)
downward sloping.
C)
vertical.
D)
upward sloping.
8.
The law of demand implies that:
A)
consumers are not responsive to price changes.
B)
consumers will buy more at lower prices.
C)
sellers will offer more on the market at higher prices.
D)
sellers will offer less on the market at lower prices.
9.
The _____ apples will decrease when apple prices rise.
A)
demand for
B)
quantity demanded of
C)
supply of
D)
equilibrium of
10.
A decrease in the price of a good will result in:
A)
an increase in demand.
B)
an increase in supply.
C)
an increase in the quantity demanded.
D)
more being supplied.
11.
Which factor would result solely in a movement along the demand curve for a particular
good?
A)
a change in the prices of related goods
B)
a change in the price of that good
C)
a change in the size of the population
D)
both a change in the price of that good and a change in the size of the population
12.
A decrease in the price of eggs will result in an increase in the:
A)
demand for eggs.
B)
supply of eggs.
C)
quantity of eggs supplied.
D)
quantity of eggs demanded.
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13.
Which statement BEST exemplifies the law of demand?
A)
As income taxes rise, fewer new cars are purchased.
B)
As the price of corn rises, more acres of corn are planted.
C)
As the price of a car rental rises, fewer cars are rented.
D)
As the population rises, more electricity is consumed.
14.
Which statement is CORRECT?
A)
A change in demand is a movement along the demand curve, and a change in
quantity demanded is a shift of the demand curve.
B)
Both a change in quantity demanded and a change in demand are movements along
the demand curve, only in different directions.
C)
Both a change in quantity demanded and a change in demand are shifts of the
demand curve, only in different directions.
D)
A change in quantity demanded is a movement along the demand curve, and a
change in demand is a shift of the demand curve.
15.
In much of the country, homeowners choose to heat their houses with either natural gas
or heating oil, both of which are normal goods. Which factor would cause an increase in
the demand for natural gas?
A)
an increase in the price of natural gas
B)
a decrease in the price of natural gas
C)
a decrease in the price of heating oil
D)
an increase in consumer incomes
16.
Raclette is a popular wintertime dish in Switzerland. It is essentially melted Raclette
cheese over boiled new potatoes. If the price of Raclette cheese decreased, we would
expect to see:
A)
an increase in demand for Raclette cheese.
B)
an increase in demand for new potatoes.
C)
no effect on the demand for either of the Raclette ingredients since this is a
traditional dish and its consumption does not depend on the prices of the
ingredients.
D)
an increase in demand for both Raclette cheese and new potatoes.
17.
When the economy suffers a downturn and the incomes of many people decrease,
vacationers are more likely to take car trips than to fly. Which statement provides one
possible explanation for this phenomenon?
A)
Air travel and travel by car are complementary goods.
B)
Air travel and travel by car are both normal goods.
C)
Air travel is a normal good and travel by car is an inferior good.
D)
Air travel is an inferior good and travel by car is a normal good.
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18.
A shift of the demand curve for thin-crust pizza would NOT be caused by a change in:
A)
buyers’ incomes.
B)
the price of thin-crust pizza.
C)
the price of thick-crust pizza.
D)
the popularity of thin-crust pizza.
19.
If goods A and B are substitutes, a decrease in the price of good B will:
A)
increase the demand for good A.
B)
increase the demand for good B.
C)
decrease the demand for good A.
D)
increase the demand for good B and decrease the demand for good A.
20.
If goods A and Z are complements, an increase in the price of good Z will:
A)
increase the demand for good A.
B)
decrease the demand for good A.
C)
decrease the demand for good Z.
D)
decrease the demand for both good A and good Z.
21.
Over the past several years, consumers have had an increasing interest in getting tattoos.
This means that the _____ for tattoos has _____.
A)
quantity demanded; increased
B)
demand; decreased
C)
demand; increased
D)
quantity demanded; decreased
22.
Which factor will NOT cause an increase in demand for good X?
A)
a decrease in income if good X is an inferior good
B)
an increase in income if good X is a normal good
C)
a decrease in the price of good X
D)
an increase in the popularity of good X with consumers
23.
Which statement is TRUE of a normal good?
A)
When income increases, the demand for the good remains unchanged.
B)
When income increases, the demand for the good decreases.
C)
When income increases, the demand for the good increases.
D)
Income and the demand are unrelated.
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24.
Which statement is TRUE of an inferior good?
A)
When income increases, demand remains unchanged.
B)
When income increases, demand decreases.
C)
When income increases, demand increases.
D)
Income and demand are unrelated.
25.
The demand curve for monthly subscriptions to HBO has shifted to the right. What
could have caused it?
A)
a fall in the price of HBO subscriptions
B)
an increase in the price of HBO subscriptions
C)
an increase in the supply of HBO subscriptions
D)
an increase in the incomes of buyers
26.
If people demand more of product A when the price of B falls, then A and B are:
A)
not related.
B)
substitutes.
C)
complements.
D)
inferior goods.
27.
If the demand for tires goes down when the price of gas goes up, then tires and gas are:
A)
substitutes.
B)
complements.
C)
both expensive.
D)
both inexpensive.
28.
An increase in the price of hamburger would probably result in _____ in the demand for
hamburger buns.
A)
a decrease
B)
an increase
C)
no change
D)
random fluctuations
29.
An announcement that smoking will harm your ability to think clearly will MOST likely
result in:
A)
an increase in the quantity of cigarettes demanded.
B)
a decrease in the demand for cigarettes.
C)
no change in smoking habits.
D)
an increase in the price of cigarettes.
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30.
If steak and potatoes are complements, when the price of steak goes up, the demand
curve for potatoes:
A)
shifts to the right.
B)
shifts to the left.
C)
stays the same.
D)
shifts to the right and then moves back.
31.
If chicken and beef are substitutes, then a fall in the price of chicken will bring about:
A)
an increase in the demand for beef.
B)
a decrease in the demand for beef.
C)
an increase in the quantity demanded of beef.
D)
no change in the demand for beef.
32.
For most goods, purchases tend to rise with increases in buyers’ incomes and to fall with
decreases in buyers’ incomes. Such goods are known as:
A)
inferior.
B)
direct.
C)
normal.
D)
indirect.
33.
An inferior good is one for which a(n) _____ in buyers’ incomes causes a(n) _____.
A)
increase; increase in demand
B)
increase; increase in quantity demanded
C)
increase; decrease in demand
D)
decrease; decrease in demand
34.
Pizza is a normal good. If students’ incomes at your college increase, the effect on pizza
will be:
A)
an increase in the demand.
B)
an increase in the quantity demanded.
C)
a decrease in the demand.
D)
no change in the demand.
35.
After graduation from college, you might have an increase in your income from a new
job. If as a result you decide that you will purchase more T-bone steak and less
hamburger, then for you hamburger is a(n) _____ good.
A)
normal
B)
substitute
C)
complementary
D)
inferior
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36.
An increase in the demand for gasoline today caused by concerns that gasoline prices
will be higher tomorrow is most likely attributable to a change in:
A)
income.
B)
consumer expectations.
C)
consumer preferences.
D)
prices of other goods.
37.
Which factor would shift the demand curve for new textbooks to the right?
A)
a decrease in the price of paper
B)
a fall in the price of used textbooks
C)
an increase in college enrollment
D)
a fall in the price of new textbooks
38.
Which factor is likely to cause a rightward shift in the demand for home-delivered
pizza?
A)
a lower price of pizza
B)
a lower price of fast-food hamburgers
C)
a higher price of pepperoni
D)
a larger population
39.
Which two goods are most likely substitutes in consumption?
A)
loaves of bread and sticks of butter
B)
loaves of bread and toasters
C)
loaves of bread and hamburger buns
D)
loaves of bread and gasoline
40.
The demand for meals at a local Chipotle will shift to the left if:
A)
Saladworks offers a 10% discount coupon in the local newspaper.
B)
the price of a meal at Chipotle rises.
C)
local incomes increase and Chipotle meals are a normal good.
D)
the price of gasoline falls in the area.
41.
Assuming that tablets are normal goods, which factor will NOT increase demand for
tablets?
A)
an increase in the incomes of tablet users
B)
cool new computer games that can only be played on tablets
C)
a very large company that makes tablets going out of business
D)
the price of laptop computers increasing
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42.
In the market for canned pinto beans, _____ will increase if income increases and if
pinto beans are a(n) _____ good.
A)
demand; inferior
B)
demand; normal
C)
supply; inferior
D)
supply; normal
43.
When the price of gas goes down, the demand for tires goes up. A likely possibility is
that tires and gas are:
A)
substitutes.
B)
complements.
C)
both inferior goods.
D)
both inexpensive.
44.
If the price of eggs decreased, it would probably result in _____ in the demand for
bacon, a complement good.
A)
a decrease
B)
an increase
C)
no change
D)
random fluctuations
45.
The demand curve for running shoes has shifted to the right. What could have caused it?
A)
a fall in the price of running shoes
B)
an increase in the price of running shoes
C)
an increase in the supply of running shoes
D)
an increased enthusiasm among the population for running as exercise
46.
Which factor will NOT cause an increase in the supply of cornflakes?
A)
an increase in the price of cornflakes
B)
a cost-saving improvement in the technology of corn production
C)
a reduction in the price of corn
D)
the expectation by producers that the price of cornflakes will fall in the future
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Use the following to answer questions 47-51:
\\
47.
(Figure: Supply of Coconuts) Use Figure: Supply of Coconuts. If the price of coconuts
decreased, it would be represented in the figure as a movement from:
A)
A to B.
B)
B to A.
C)
C to A.
D)
E to B.
48.
(Figure: Supply of Coconuts) Use Figure: Supply of Coconuts. If the prices of inputs
(e.g., labor, fertilizer, and fuel) used to produce and transport coconuts increased, it
could be represented in the figure as a movement from:
A)
A to B.
B)
B to A.
C)
C to A.
D)
E to B.
49.
(Figure: Supply of Coconuts) Use Figure: Supply of Coconuts. If the prices of inputs
(e.g., labor, fertilizer, and fuel) used to produce and transport coconuts decreased, it
could be represented in the figure as a movement from:
A)
A to B.
B)
B to A.
C)
C to A.
D)
E to B.
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50.
(Figure: Supply of Coconuts) Use Figure: Supply of Coconuts. An improvement in the
technology used to harvest coconuts (e.g., a faster, less expensive coconut picker) would
be represented in the figure as a movement from:
A)
A to C.
B)
B to A.
C)
C to A.
D)
B to E.
51.
(Figure: Supply of Coconuts) Use Figure: Supply of Coconuts. An expectation on the
part of coconut suppliers that the price of coconuts will be significantly higher in the
very near future would be represented in the figure as a movement from:
A)
A to B.
B)
B to A.
C)
A to C.
D)
B to E.
Use the following to answer questions 52-53:
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52.
(Figure: The Supply of Online Movie Rentals) Use Figure: The Supply of Online Movie
Rentals. A decrease in the price of online movies sold by movie producers to rental
outlets like Amazon and Apple would result in a change illustrated by the move from:
A)
n to o in panel A.
B)
p to q in panel B.
C)
s to t in panel C.
D)
u to v in panel D.
53.
(Figure: The Supply of Online Movie Rentals) Use Figure: The Supply of Online Movie
Rentals. A decrease in the price of online movie rentals would result in a change
illustrated by the move from:
A)
n to o in panel A.
B)
p to q in panel B.
C)
s to t in panel C.
D)
u to v in panel D.
Use the following to answer questions 54-55:
54.
(Table: Supply of Lemonade) Use Table: Supply of Lemonade. If the price of lemonade
is $1 per cup, the total quantity of lemonade supplied will be _____ cups per day.
A)
50
B)
80
C)
25
D)
90
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55.
(Table: Supply of Lemonade) Use Table: Supply of Lemonade. When the price of
lemonade is $1 per cup, the quantity of lemonade supplied by Eli will be _____ cups per
day.
A)
40
B)
90
C)
10
D)
25
56.
_____ illustrates a positive relationship between price and quantity.
A)
A demand curve
B)
A supply curve
C)
A production possibility frontier
D)
Equilibrium
57.
The typical supply curve illustrates that:
A)
other things equal, the quantity supplied for a good is inversely related to the price
of a good.
B)
other things equal, the supply of the good creates its own demand for the good.
C)
other things equal, the quantity supplied for a good is positively related to the price
of a good.
D)
price and quantity supplied are unrelated.
58.
When the price of lamps increases, the:
A)
supply increases.
B)
quantity supplied increases.
C)
supply decreases.
D)
quantity supplied decreases.
59.
When the price of desks increases, the:
A)
quantity supplied increases.
B)
supply increases.
C)
quantity supplied decreases.
D)
supply decreases.
60.
A decrease in supply of good X means:
A)
a shift to the left of the entire supply curve for good X.
B)
a movement down the supply curve as prices of good X go down.
C)
that less of good X will be demanded at every price.
D)
that more of good X will be supplied at every price.
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61.
The primary difference between a change in supply and a change in the quantity
supplied is that:
A)
a change in quantity supplied is a movement along the supply curve, while a
change in supply is a shift in the supply curve.
B)
both a change in quantity supplied and a change in supply are movements along the
supply curve, only in different directions.
C)
a change in supply is related to the supply curve, while a change in quantity
supplied is related to shifts in the demand curve that shift the supply curve.
D)
a change in supply is a movement along the supply curve, while a change in
quantity supplied is a shift in the supply curve.
62.
If the price of a commodity increases, you can usually expect the:
A)
supply to increase.
B)
quantity supplied to increase.
C)
quantity supplied to decrease.
D)
supply curve to shift to the right.
63.
In the market for tacos, the factor that does NOT shift the supply curve to the left is:
A)
an increase in the price of beef.
B)
an increase in the wages of taco shop workers.
C)
fewer taco shops.
D)
a decrease in the price of tacos.
64.
In the local market for coffee, if Joyce’s Java and Everyday Joe’s coffee shops go out of
business, the _____ curve shifts to the _____.
A)
supply; right
B)
demand; left
C)
supply; left
D)
demand; right
65.
Which factor is NOT a determinant of supply?
A)
expectations regarding future prices
B)
the technology of production
C)
the cost of production
D)
consumer tastes
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66.
Which influence does NOT shift the supply curve?
A)
people deciding that they want to buy more of the product
B)
a decrease in the price firms expect to receive in the future
C)
a rise in the wages paid to workers
D)
the development of a new production technology
67.
Which factor will NOT cause an increase in the supply of good X?
A)
an improvement in the technology used to produce good X
B)
an increase in the number of firms that sell good X
C)
an increase in the price of inputs used to produce good X
D)
a decrease in the price of labor used to produce good X
68.
Consider the supply curve for cotton shirts. An increase in the price of cotton will:
A)
increase the supply of cotton shirts.
B)
decrease the supply of cotton shirts.
C)
increase the quantity supplied of cotton shirts.
D)
decrease the demand for cotton shirts.
69.
Over the past few years, the technology associated with producing flat-panel televisions
has improved. This has led to a(n) _____ in the _____ flat-panel televisions.
A)
increase; supply of
B)
decrease; demand for
C)
decrease; supply of
D)
decrease; quantity supplied of
70.
A technological advance in the production of automobiles will _____ the _____
automobiles.
A)
decrease; demand for
B)
increase; supply of
C)
decrease; demand
D)
decrease; supply of
71.
Which factor would cause an INCREASE in the supply of a good?
A)
input prices rising
B)
a fall in the price of the good
C)
an increase in the number of sellers
D)
expectations of future price increases
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72.
Which factor would cause an INCREASE in the supply of a good?
A)
an increase in input prices
B)
suppliers’ expectations of higher prices in the future
C)
an increase in the price of the good
D)
a decrease in the price of resources used in production
73.
Which factor would cause a DECREASE in the supply of a good?
A)
an increase in the price of goods that are used in production
B)
suppliers’ expectations of lower prices in the future
C)
an advancement in the technology for producing the good
D)
an increase in the number of producers
74.
If the price of mozzarella cheese (an ingredient in pizza) declines, there will be:
A)
a decrease in the supply of pizza.
B)
an increase in the supply of pizza.
C)
a decrease in the quantity of pizza supplied.
D)
no change in the supply of pizza.
75.
Which factor would cause an INCREASE in the supply of a good?
A)
an increase in input prices
B)
a decrease in the number of sellers in the market
C)
suppliers’ expectations of higher prices in the future
D)
an advancement in the technology for producing the good
76.
Which factor would cause a DECREASE in the supply of a good?
A)
a decrease in input prices
B)
an increase in the number of sellers in the market
C)
suppliers’ expectations of higher prices in the future
D)
an advancement in the technology for producing the good
77.
Which factor would NOT cause the supply curve to shift?
A)
a change in the technology of production
B)
a change in factor costs
C)
a change in the price of the good
D)
a change in suppliers’ expectations of future prices
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78.
Which factor would cause a LEFTWARD shift in the supply curve for a good?:
A)
an increase in the number of sellers
B)
a technological improvement in production
C)
an increase in the cost of an input
D)
an increase in the number of buyers
79.
Which factor is MOST likely to shift the supply of milk to the right?
A)
a tax on each gallon of milk produced
B)
an increase in household income, milk being a normal good
C)
a decrease in the price of feed given to dairy cows
D)
the bankruptcy of many small dairy farms
80.
In the market for wheat, if the price of ethanol (which is made from corn, a substitute in
the production process) increased dramatically, the _____ wheat would _____.
A)
supply of; increase
B)
supply of; decrease
C)
demand for; increase
D)
demand for; decrease
Use the following to answer questions 81-86:
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81.
(Figure: Demand and Supply of Gasoline) Use Figure: Demand and Supply of Gasoline.
A factor that may have changed supply from S1 to S2 is:
A)
better technology in the production of gasoline.
B)
increased demand.
C)
lower labor productivity in gasoline production.
D)
increased prices of substitutes in production for gasoline.
82.
(Figure: Demand and Supply of Gasoline) Use Figure: Demand and Supply of Gasoline.
Given the equilibrium after a change in supply from S1 to S2:
A)
at the old price of $2.50, there will be pressure for the price to fall.
B)
the new price will be $2.00.
C)
the new quantity will be 600.
D)
the price will remain constant.
83.
Figure: Demand and Supply of Gasoline) Use Figure: Demand and Supply of Gasoline.
The initial equilibrium price and quantity (at intersection of S1 and D) of gasoline are:
A)
$2.00 and 450 gallons.
B)
$1.50 and 400 gallons.
C)
$2.00 and 200 gallons.
D)
$2.50 and 300 gallons.
84.
(Figure: Demand and Supply of Gasoline) Use Figure: Demand and Supply of Gasoline.
Given the initial equilibrium of S1 and D, any price lower than _____ will exert pressure
for the price to _____.
A)
$2.00; fall
B)
$2.50; rise
C)
$3.00; rise
D)
$2.50; fall
85.
(Figure: Demand and Supply of Gasoline) Use Figure: Demand and Supply of Gasoline.
When the supply curve shifted from the initial equilibrium, the new intersection of
supply and demand has a price of _____ and quantity of 400. This supply shift could
have resulted from _____.
A)
$1.50; an increase in consumers’ income
B)
$1.50; an improvement in refining technology
C)
$2.00; an increase in the number of buyers
D)
$2.00; an increase in consumers’ income
Page 18
86.
(Figure: Demand and Supply of Gasoline) Use Figure: Demand and Supply of Gasoline.
What might cause the supply curve to shift from S2 back to the initial supply curve S1?
A)
The Organization of Petroleum Exporting Countries (OPEC) restricts the
production of crude oil.
B)
OPEC increases the production of crude oil.
C)
U.S. citizens want to buy more gas.
D)
Technology in the refinement of gasoline greatly improves.
Use the following to answer questions 87-92:
87.
(Table: The Market for Chocolate-Covered Peanuts) Use Table: The Market for
Chocolate-Covered Peanuts. If the price of chocolate-covered peanuts is $0.60, the price
will:
A)
not change.
B)
fall to $0.30.
C)
fall to $0.50.
D)
rise to $0.70.
88.
(Table: The Market for Chocolate-Covered Peanuts) Use Table: The Market for
Chocolate-Covered Peanuts. The equilibrium quantity and the equilibrium price are
_____ bags per month and _____.
A)
140; $0.40
B)
175; $0.60
C)
175; $0.80
D)
210; $0.50
Page 19
89.
(Table: The Market for Chocolate-Covered Peanuts) Use Table: The Market for
Chocolate-Covered Peanuts. If the price of chocolate-covered peanuts is $0.80, there is
a monthly:
A)
surplus of 140 bags per month.
B)
shortage of 140 bags per month.
C)
surplus of 70 bags per month.
D)
shortage of 70 bags per month.
90.
(Table: The Market for Chocolate-Covered Peanuts) Use Table: The Market for
Chocolate-Covered Peanuts. A surplus of 210 bags of chocolate-covered peanuts per
month exists if the price is _____ per bag.
A)
$0.90
B)
$0.80
C)
$0.60
D)
$0.40
91.
(Table: The Market for Chocolate-Covered Peanuts) Use Table: The Market for
Chocolate-Covered Peanuts. If the price of chocolate-covered peanuts is $0.50, there is
a:
A)
surplus of 35 bags per month.
B)
shortage of 35 bags per month.
C)
surplus of 70 bags per month.
D)
shortage of 70 bags per month.
92.
(Table: The Market for Chocolate-Covered Peanuts) Use Table: The Market for
Chocolate-Covered Peanuts. A shortage of 210 bags of chocolate-covered peanuts per
month exists if the price is _____ per bag.
A)
$0.80
B)
$0.60
C)
$0.40
D)
$0.30
93.
What is the difference between a shortage and scarcity?
A)
Scarcity will almost always exist, but a shortage will exist only if the price is kept
below the equilibrium level.
B)
Scarcity is a result of two or more alternative uses, and quantities of supply and
demand adjusting to flexible prices will create shortages.
C)
A shortage will exist when a good is scarce.
D)
There is no distinction between the two. They are the same thing.
Page 20
Use the following to answer questions 94-101:
94.
(Figure: The Demand and Supply of Wheat) Use Figure: The Demand and Supply of
Wheat. If a price of $10 temporarily exists in this market, a _____ of _____ bushels per
period will result.
A)
shortage; 10,000
B)
shortage; 8,000
C)
surplus; 8,000
D)
surplus; 4,000
95.
(Figure: The Demand and Supply of Wheat) Use Figure: The Demand and Supply of
Wheat. A price of _____ will result in a _____.
A)
$6; shortage
B)
$9; surplus
C)
$8; shortage
D)
$4; surplus
96.
(Figure: The Demand and Supply of Wheat) Use Figure: The Demand and Supply of
Wheat. If there is an increase in demand of 2,000 bushels per period at each price, the
equilibrium price and quantity will be _____ and _____ bushels per period, respectively.
A)
$5; 5,000
B)
$6; 7,000
C)
$7; 7,000
D)
$8; 8,000