The Market Forces of Supply and Demand 955
46.
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
47.
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.
48.
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.
49.
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.
50.
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.
Table 4-11
Price
Quantity
Demanded
Quantity
Supplied
$10
10
60
$8
20
45
$6
30
30
$4
40
15
$2
50
0
51.
Refer to Table 4-11. The equilibrium price and quantity, respectively, are
a.
$2 and 50 units.
b.
$6 and 30 units.
c.
$6 and 60 units.
d.
$12 and 30 units.
52.
Refer to Table 4-11. If the price were $8, a
a.
shortage of 20 units would exist, and price would tend to rise.
b.
surplus of 25 units would exist, and price would tend to fall.
c.
shortage of 25 units would exist, and price would tend to rise.
d.
surplus of 45 units would exist, and price would tend to fall.
53.
Refer to Table 4-11. If the price were $4, a
a.
surplus of 15 units would exist, and price would tend to fall.
b.
shortage of 25 units would exist, and price would tend to rise.
c.
surplus of 25 units would exist, and price would tend to fall.
d.
shortage of 40 units would exist, and price would tend to rise.
Table 4-12
A country club usually only allows members to purchase tickets for its celebrity golf tournament,
but the club is
considering allowing non-members to purchase tickets this year. The demand and
supply schedules are as follows:
Price
Quantity Demanded
by Members
Quantity Demanded
by Non-members
Quantity Supplied
$10
1000
500
600
$15
800
400
600
$20
600
300
600
$25
400
200
600
$30
200
100
600
54.
Refer to Table 4–12. If only members are allowed to purchase tickets to this year‘s celebrity
golf tournament,
then what will be the equilibrium price?
a. $10
b. $15
c. $20
d. $25
55.
Refer to Table 4–12. If both members and non-members are allowed to purchase tickets to this
year’s celebrity
golf tournament, then what will be the equilibrium price?
a. $10
b. $15
c. $20
d. $25
56.
Refer to Table 4–12. If both members and non-members are allowed to purchase tickets to this
year’s celebrity
golf tournament and the country club sets the ticket price at $30, then there will be
a.
a shortage of 300 tickets.
b.
a surplus of 300 tickets.
c.
600 tickets sold.
d.
600 tickets unsold.
57.
Refer to Table 4–12. If both members and non-members are allowed to purchase tickets to this
year’s celebrity
golf tournament and the country club sets the ticket price at $20, then there will be
a.
a shortage of 300 tickets.
b.
a surplus of 300 tickets.
c.
300 tickets sold.
d.
600 tickets unsold.
Table 4-13
The demand schedule below pertains to sandwiches demanded per week.
Price
Harry’s
Quantity
Demanded
Darby’s
Quantity
Demanded
Jake’s
Quantity
Demanded
$3
3
4
3
$5
1
2
x
58.
Refer to Table 4–13. Regarding Harry and Darby, whose demand for sandwiches conforms to
the law of
demand?
a.
only Harry’s
b.
only Darby’s
c.
both Harry’s and Darby’s
d.
neither Harry’s nor Darby’s
59.
Refer to Table 4–13. Regarding Harry and Darby, for whom are sandwiches a normal good?
a.
only for Harry
b.
only for Darby
c.
for both Harry and Darby
d.
This cannot be determined from the given information.
60.
Refer to Table 4-13. Suppose x = 1. Then it must be true that
a.
Harry and Jake have the same income, which is lower than Darby’s income.
b.
if sandwiches and potato chips are complements for Harry, then those two goods are also
complements for
Jake.
c.
Harry’s demand curve is identical to Jake’s demand curve.
d.
All of the above are correct.
61.
Refer to Table 4-13. Suppose x = 1. Then the slope of the market demand curve is
a. –3.
b. –1/3.
c.
1/3.
d.
3.
62.
Refer to Table 4–13. Suppose Harry, Darby, and Jake are the only demanders of sandwiches.
Also suppose x = 2. Then
a.
the slope of Jake’s demand curve is -1/2, and the slope of the market demand curve is -5/2.
b.
the slope of Jake’s demand curve is -1/2, and the slope of the market demand curve is -2/5.
c.
the slope of Jake’s demand curve is -2, and the slope of the market demand curve is -5/2.
d.
the slope of Jake’s demand curve is -2, and the slope of the market demand curve is -2/5.
63.
Refer to Table 4–13. Suppose Harry, Darby, and Jake are the only demanders of sandwiches
and that the market
demand violates the law of demand. Then, in the table, the value of x must be
a.
less than or equal to 5.
b.
greater than or equal to 5.
c.
greater than or equal to 7.
d.
greater than or equal to 10.
64.
Refer to Table 4–13. Suppose Harry, Darby, and Jake are the only demanders of sandwiches.
Also suppose the
following:
• x = 2.
•
The current price of a sandwich is $5.00.
•
The market quantity supplied of sandwiches is 10.
•
The law of supply applies to the supply of sandwiches.
Then there is a
a.
shortage of 5 sandwiches, and the price would be expected to rise from its current level of
$5.00.
b.
shortage of 5 sandwiches, and the price would be expected to fall from its current level of
$5.00.
c.
surplus of 5 sandwiches, and the price would be expected to rise from its current level of $5.00.
d.
surplus of 5 sandwiches, and the price would be expected to fall from its current level of $5.00.
65.
Refer to Table 4–13. Suppose Harry, Darby, and Jake are the only demanders of sandwiches.
Also suppose the
following:
• x = 2.
•
The current price of a sandwich is $3.00.
•
The market quantity supplied of sandwiches is 4.
•
The slope of the supply curve is 2.
Then there is currently a
a.
shortage of 6 sandwiches, and the equilibrium price of a sandwich is less than $3.00.
b.
shortage of 6 sandwiches, and the equilibrium price of a sandwich is $5.00.
c.
surplus of 6 sandwiches, and the equilibrium price of a sandwich is less than $3.00.
d.
surplus of 6 sandwiches, and the equilibrium price of a sandwich is $5.00.
66.
Refer to Table 4–13. Suppose Harry, Darby, and Jake are the only demanders of sandwiches.
Also suppose the
following:
• x = 2.
•
The current price of a sandwich is $3.00.
•
The market quantity supplied of sandwiches is 5.
•
The slope of the supply curve is 1.
Then there is currently a
a.
shortage of 5 sandwiches, and the equilibrium price of a sandwich is between $3.00 and $5.00.
b.
shortage of 5 sandwiches, and the equilibrium price of a sandwich is $5.00.
c.
surplus of 5 sandwiches, and the equilibrium price of a sandwich is between $3.00 and $5.00.
d.
surplus of 5 sandwiches, and the equilibrium price of a sandwich is $5.00.
Figure 4-17
67.
Refer to Figure 4–17. At a price of
a.
$2, there is a surplus of 6 units.
b.
$5, there is a surplus of 25 units.
c.
$5, there is a shortage of $25.
d.
$7, there is a surplus of 4 units.
68.
Refer to Figure 4–17. At a price of
a.
$2, there is a shortage of 6 units.
b.
$5, there is a surplus of 25 units.
c.
$5, there is a shortage of $25.
d.
$7, there is a shortage of 4 units.
69.
Refer to Figure 4–17. At a price of
a.
$8, there is a surplus of 6 units.
b.
$5, there is neither a shortage nor a surplus.
c.
$2, there is a shortage of 6 units.
d.
All of the above are correct.
Figure 4-18
70.
Refer to Figure 4-18. Equilibrium price and quantity are, respectively,
a.
$15 and 200 units.
b.
$25 and 600 units.
c.
$25 and 400 units.
d.
$35 and 200 units.
71.
Refer to Figure 4-18. At the equilibrium price,
a.
200 units would be supplied and demanded.
b.
400 units would be supplied and demanded.
c.
600 units would be supplied and demanded.
d.
600 units would be supplied, but only 200 would be demanded.
72.
Refer to Figure 4-18. At a price of $35, there would be a
a.
shortage of 400 units.
b.
surplus of 200 units.
c.
surplus of 400 units.
d.
surplus of 600 units.
73.
Refer to Figure 4-18. At a price of $35, there would be
a.
a shortage, and the price would tend to rise from $35 to a higher price.
b.
a surplus, and the price would tend to rise from $35 to a higher price.
c.
excess demand, and the price would tend to fall from $35 to a lower price.
d.
excess supply, and the price would tend to fall from $35 to a lower price.
74.
Refer to Figure 4-18. At what price would there be an excess supply of 200 units of the good?
a. $15
b. $20
c. $30
d. $35
75.
Refer to Figure 4-18. At a price of $15, there would be a
a.
surplus of 400 units.
b.
shortage of 200 units.
c.
shortage of 400 units.
d.
shortage of 600 units.
76.
Refer to Figure 4-18. At a price of $20, there would be a(n)
a.
shortage. The law of supply and demand predicts that the price will fall from $20 to a lower
price.
b.
surplus. The law of supply and demand predicts that the price will rise from $20 to a higher
price.
c.
excess demand. The law of supply and demand predicts that the price will rise from $20 to a
higher price.
d.
excess supply. The law of supply and demand predicts that the price will fall from $20 to a
lower price.
77.
Refer to Figure 4-18. At what price would there be an excess demand of 200 units of the
good?
a.
$15
b.
$20
c.
$30
d.
$35
972 The Market Forces of Supply and Demand
Figure 4-19
78.
Refer to Figure 4-19. In this market, equilibrium price and quantity, respectively, are
a.
$10 and 30 units.
b.
$10 and 50 units.
c.
$10 and 70 units.
d.
$4 and 50 units.
79.
Refer to Figure 4-19. If price in this market is currently $14, then there would be a(n)
a.
surplus of 20 units. The law of supply and demand predicts that the price will rise from $14 to a
higher price.
b.
excess supply of 20 units. The law of supply and demand predicts that the price will fall from
$14 to a lower
price.
c.
surplus of 40 units. The law of supply and demand predicts that the price will rise from $14 to a
higher price.
d.
excess supply of 40 units. The law of supply and demand predicts that the price will fall from
$14 to a lower
price.
80.
Refer to Figure 4-19. If there is currently a shortage of 20 units of the good, then the law of
a.
demand predicts that the price will rise by $2 to eliminate the shortage.
b.
supply predicts that the price will rise by $2 to eliminate the shortage.
c.
supply and demand predicts that the price will rise by $2 to eliminate the shortage.
d.
supply and demand predicts that the price will fall by $2 to eliminate the shortage.
974 The Market Forces of Supply and Demand
Figure 4-20
81.
Refer to Figure 4-20. In this market, equilibrium price and quantity, respectively, are
a.
$15 and 400 units.
b.
$20 and 600 units.
c.
$25 and 500 units.
d.
$25 and 800 units.
82.
Refer to Figure 4-20. At a price of $20, which of the following statements is not correct?
a.
The market is in equilibrium.
b.
Equilibrium price is equal to equilibrium quantity.
c.
There is no pressure for price to change.
d.
The quantity of the good that is bought and sold is 600 units.