1.When there is a surplus, the actual price decreases.
2.Assume that at the current market price of $4 per unit of a good, you are willing and able to buy 20 units. Last year at a price of $4 per unit, you would have purchased 30 units. What is most likely to have happened over the last year?
A) Demand has increased.
B) Demand has decreased.
C) Supply has increased.
D) Supply has decreased.
E) Quantity supplied has decreased.
3.If demand moves to the right as supply moves to the right, then
A) equilibrium price must increase, but equilibrium quantity may rise, fall, or remain unchanged.
B) equilibrium price and quantity must both go down.
C) equilibrium quantity must rise, but equilibrium price may rise, fall, or remain unchanged.
D) equilibrium price and quantity must both go up.
E) None of these.
7.When a shortage exists in a market,
A) the actual price is lower than the equilibrium price.
B) there is an excess quantity supplied.
C) consumers increase the quantities they are willing and able to purchase.
D) suppliers will stop producing until the shortage disappears.
E) the actual price is greater than the equilibrium price.
11.Disequilibrium means the quantity demanded is greater than the quantity supplied at a particular price.
12.This month Fritter Firm finds that it has been able to sell 200 fritters at a price of $1 per fritter. Last month, the firm was able to sell only 150 fritters at $1 per fritter. What is most likely to have happened over the month?
A) Demand increased.
B) Supply increased.
C) Supply decreased.
D) Quantity supplied decreased.
E) Quantity demanded increased.
16.Velcro is becoming more and more popular for a variety of uses, including as fasteners for shoes. What should happen to the equilibrium price and quantity for shoelaces as a result?
A) Both price and quantity should increase.
B) Both price and quantity should decrease.
C) Price should increase and quantity decrease.
D) Price should decrease and quantity increase.
17.Attempts are being made to develop a biodegradable plastic using agricultural produce such as potatoes. If these attempts are successful, what will happen to the equilibrium price and quantity of potatoes?
A) Price will increase and quantity decrease.
B) Price will increase and quantity increase.
C) Price will decrease and quantity increase.
D) Price will decrease and quantity decrease.
E) No change in equilibrium price and quantity will occur.
18.An increase in supply will cause equilibrium price to __________ and equilibrium quantity to __________.
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease
E) remain constant; increase
19.Suppose demand increases and supply increases. Which of the following will happen?
A) equilibrium price will increase
B) equilibrium price will decrease
C) equilibrium quantity will increase
D) equilibrium quantity will decrease
E) neither the equilibrium price nor the equilibrium quantity will change
20.If both demand and supply increase, price will
A) always increase
B) always decrease
C) increase only if supply increases more than demand does
D) increase only if demand increases more than supply does
E) decrease only if supply increases less than demand does