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The unique point at which the supply and demand curves intersect is called
a. market harmony.
b. coincidence.
c. equivalence.
d. equilibrium.
3. At the equilibrium price, the quantity of the good that buyers are willing and able to buy
a. is greater than the quantity that sellers are willing and able to sell.
b. exactly equals the quantity that sellers are willing and able to sell.
c. is less than the quantity that sellers are willing and able to sell.
d. Either a) or c) could be correct.
5. In a given market, how are the equilibrium price and the market-clearing price related?
a. There is no relationship.
b. They are the same price.
c. The market-clearing price exceeds the equilibrium price.
d. The equilibrium price exceeds the market-clearing price.
6. Buyers are able to buy all they want to buy and sellers are able to sell all they want to sell at
a. prices at and above the equilibrium price.
b. prices at and below the equilibrium price.
c. prices above and below the equilibrium price, but not at the equilibrium price.
d. the equilibrium price but not above or below the equilibrium price.
10. Which of the following events must cause equilibrium price to fall?
a. demand increases and supply decreases
b. demand and supply both decrease
c. demand decreases and supply increases
d. demand and supply both increase
15. Which of the following events must cause equilibrium price to rise?
a. demand increases and supply decreases
b. demand and supply both decrease
c. demand decreases and supply increases
d. demand and supply both increase
16. If the demand for 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 both to increase.
d. and equilibrium quantity both to decrease.
17. 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.
18. 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.
19. If the supply of 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.
21. Suppose that demand for a good increases and, at the same time, supply of the good decreases. What would happen in
the market for the good?
a. Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous.
b. Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous.
c. Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.
d. Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
22. Suppose that demand for a good decreases and, at the same time, supply of the good decreases. What would happen in
the market for the good?
a. Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous.
b. Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous.
c. Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.
d. Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
Table 4-9
An Increase in Supply A Decrease in Supply
An Increase in Demand A B
A Decrease in Demand C D
23. Refer to Table 4-9. Which combination would produce an increase in equilibrium quantity and an indeterminate
change in equilibrium price?
a. A
b. B
c. C
d. D
24. Refer to Table 4-9. Which combination would produce an increase in equilibrium price and an indeterminate change
in equilibrium quantity?
a. A
b. B
c. C
d. D
25. Refer to Table 4-9. Which combination would produce a decrease in equilibrium price and an indeterminate change
in equilibrium quantity?
a. A
b. B
c. C
d. D
26. Refer to Table 4-9. Which combination would produce a decrease in equilibrium quantity and an indeterminate
change in equilibrium price?
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a. A
b. B
c. C
d. D
Table 4-10
The following table shows the number of cases of water each seller is willing to sell at the prices listed.
Price per case Alpine Springs Brook Mountain Cascade Waters Dew Good
$0.00 0 cases 0 cases 0 cases 0 cases
$3.00 100 cases 40 cases 60 cases 100 cases
$6.00 200 cases 80 cases 120 cases 200 cases
$9.00 300 cases 120 cases 180 cases 300 cases
27. Refer to Table 4-10. If Alpine Springs and Dew Good are the only two suppliers in this market, by how much does
the market quantity supplied change with each $3 increase in price?
a. -200 cases
b. -100 cases
c. 100 cases
d. 200 cases
28. Refer to Table 4-10. If the four suppliers listed are the only suppliers in this market and the market demand schedule
is:
Price Quantity Demanded
$0.00 1200
$3.00 900
$6.00 600
$9.00 300
the equilibrium price and quantity are
a. $0.00 and 1200 cases
b. $3.00 and 300 cases
c. $6.00 and 600 cases
d. $9.00 and 600 cases
29. Refer to Table 4-10. If the four suppliers listed are the only suppliers in this market and the market quantity
demanded is 500 cases when the price is $5.00, which of the following statements is correct?
a. The market is in equilibrium at a price of $5.00.
b. There is a surplus of 100 cases at a price of $5.00.
c. There is a shortage of 100 cases at a price of $5.00.
d. There is a shortage of 50 cases at a price of $5.00.
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31. Which of the following would cause price to decrease?
a. a decrease in supply
b. an increase in demand
c. a surplus of the good
d. a shortage of the good
32. When the price of a good is higher than the equilibrium price,
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.
34. If a surplus exists in a market, then we know that the actual price is
a. above the equilibrium price, and quantity supplied is greater than quantity demanded.
b. above the equilibrium price, and quantity demanded is greater than quantity supplied.
c. below the equilibrium price, and quantity demanded is greater than quantity supplied.
d. below the equilibrium price, and quantity supplied is greater than quantity demanded.
37. Suppose roses are currently selling for $40 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.
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38. Suppose chocolate-dipped strawberries are currently selling for $30 per dozen, but the equilibrium price of chocolate-
dipped strawberries is $20 per dozen. We would expect a
a. shortage to exist and the market price of chocolate-dipped strawberries to increase.
b. shortage to exist and the market price of chocolate-dipped strawberries to decrease.
c. surplus to exist and the market price of chocolate-dipped strawberries to increase.
d. surplus to exist and the market price of chocolate-dipped strawberries to decrease.
39. The current price of blue jeans is $30 per pair, but the equilibrium price of blue jeans is $25 per pair. As a result,
a. the quantity supplied of blue jeans exceeds the quantity demanded of blue jeans at the $30 price.
b. the equilibrium quantity of blue jeans exceeds the quantity demanded at the $30 price.
c. there is a surplus of blue jeans at the $30 price.
d. All of the above are correct.
40. A university's football stadium is never more than half-full during football games. This indicates
a. the ticket price is above the equilibrium price.
b. the ticket price is below the equilibrium price.
c. the ticket price is at the equilibrium price.
d. nothing about the equilibrium price.
41. A university's football stadium is always sold out, and students who wait in line for hours may be turned away. This
indicates
a. the ticket price is above the equilibrium price.
b. the ticket price is below the equilibrium price.
c. the ticket price is at the equilibrium price.
d. nothing about the equilibrium price.
42. When the price of a good is lower than the equilibrium price,
a. a surplus 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 supplied exceeds quantity demanded.
44. If a shortage exists in a market, then we know that the actual price is
a. above the equilibrium price, and quantity supplied is greater than quantity demanded.
b. above the equilibrium price, and quantity demanded is greater than quantity supplied.
c. below the equilibrium price, and quantity demanded is greater than quantity supplied.
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d. below the equilibrium price, and quantity supplied is greater than quantity demanded.
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.
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Table 4-11
Quantity Quantity
Price
Demanded 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.
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:
Quantity Demanded Quantity Demanded
Price Quantity Supplied
by Members by Non-members
$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
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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.
Harry’s Darby’s Jake’s
Price Quantity Quantity Quantity
Demanded Demanded 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.
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