Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix)
110. Refer to the above diagram. If this is a competitive market, price and quantity will move
toward:
111. At the point where the demand and supply curves for a product intersect:
112. The rationing function of prices refers to the:
Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix)
113. If there is a shortage of product X, and the price is free to change:
114. At the current price there is a shortage of a product. We would expect price to:
115. A surplus of a product will arise when price is:
Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix)
116. If price is above the equilibrium level, competition among sellers to reduce the resulting:
117. If we say that a price is too high to clear the market, we mean that:
118. Assume in a competitive market that price is initially above the equilibrium level. We
can predict that price will:
Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix)
119. Assume in a competitive market that price is initially below the equilibrium level. We
can predict that price will:
120. A product market is in equilibrium:
121. There will be a surplus of a product when:
Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix)
122. Camille’s Creations and Julia’s Jewels both sell beads in a competitive market. If at the
market price of $5, both are running out of beads to sell (they can’t keep up with the quantity
demanded at that price), then we would expect both Camille’s and Julia’s to:
123. Productive efficiency refers to:
124. If an economy produces its most wanted goods but uses outdated production methods, it
is:
Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix)
125. Allocative efficiency is concerned with:
126. Allocative efficiency involves determining:
127. The equilibrium price and quantity in a market usually produces allocative efficiency
because:
Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix)
128. Allocative efficiency refers to:
129. Which of the following statements is true about productive and allocative efficiency?
130. Other things equal, an excise tax on a product will:
Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix)
131. Assuming conventional supply and demand curves, changes in the determinants of both
supply and demand will:
132. Which of the following will cause a decrease in market equilibrium price and an increase
in equilibrium quantity?
133. Suppose that in each of four successive years producers sell more of their product and at
lower prices. This could be explained:
Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix)
134. Which of the following statements is correct?
135. In which of the following instances is the effect on equilibrium price dependent on the
magnitude of the shifts in supply and demand?
Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix)
136. Refer to the above diagram, which shows demand and supply conditions in the
competitive market for product X. If the initial demand and supply curves are D0 and S0,
equilibrium price and quantity will be:
137. Refer to the above diagram, which shows demand and supply conditions in the
competitive market for product X. Given D0, if the supply curve moved from S0 to S1, then:
138. Refer to the above diagram, which shows demand and supply conditions in the
competitive market for product X. If supply is S1 and demand D0, then
Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix)
139. Refer to the above diagram, which shows demand and supply conditions in the
competitive market for product X. A shift in the demand curve from D0 to D1 might be caused
by a(n):
140. Refer to the above diagram, which shows demand and supply conditions in the
competitive market for product X. Other things equal, a shift of the supply curve from S0 to S1
might be caused by a(n):
141. If the supply and demand curves for a product both decrease, then equilibrium:
Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix)
142. If the supply of a product decreases and the demand for that product simultaneously
increases, then equilibrium:
143. Assuming competitive markets with typical supply and demand curves, which of the
following statements is correct?
Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix)
144. Refer to the above diagram, in which S1 and D1 represent the original supply and demand
curves and S2 and D2 the new curves. In this market:
145. Refer to the above diagram, in which S1 and D1 represent the original supply and demand
curves and S2 and D2 the new curves. In this market:
146. Refer to the above diagram, in which S1 and D1 represent the original supply and demand
curves and S2 and D2 the new curves. In this market the indicated shift in supply may have
been caused by:
Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix)
147. Refer to the above diagram, in which S1 and D1 represent the original supply and demand
curves and S2 and D2 the new curves. In this market the indicated shift in demand may have
been caused by:
148. Refer to the above. An increase in income, if X is a normal good, will:
Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix)
149. Refer to the above. An increase in the price of a product that is a close substitute for X
will:
150. Refer to the above. A decrease in the number of consumers of product X will:
151. Refer to the above. An increase in the prices of resources used to produce X will:
Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix)
152. Refer to the above. An improvement in the technology used to produce X will:
153. Refer to the above. A reduction in the number of firms producing X will:
154. Refer to the above. An increase in the price of a product that is a complement to X will:
Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix)
155. Refer to the above. If X is an inferior good, a decrease in income will:
156. Refer to the above. Consumer expectations that the price of X will rise sharply in the
future will:
157. Data from the registrar’s office at Gigantic State University indicate that over the past
twenty years tuition and enrollment have both increased. From this information we can
conclude that:
Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix)
158. One can say with certainty that equilibrium price will decline when supply:
159. Suppose that in 2007, Ford sold 500,000 Mustangs at an average price of $18,800 per
car; in 2008, 600,000 Mustangs were sold at an average price of $19,500 per car. These
statements:
160. Since their introduction, prices of DVD players have fallen and the quantity purchased
has increased. This statement:
Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix)
161. Which of the above diagrams illustrate(s) the effect of an increase in automobile worker
wages on the market for automobiles?
Chapter 03 – Demand, Supply, and Market Equilibrium (+ Appendix)
162. Which of the above diagrams illustrate(s) the effect of a decline in the price of personal
computers on the market for software?
163. Which of the above diagrams illustrate(s) the effect of a decrease in incomes on the
market for secondhand clothing?
164. Which of the above diagrams illustrate(s) the effect of a governmental subsidy on the
market for AIDS research?