Deck 4: Markets in Action

Question 1

If the demand for a good decreased, what would be the effect on the equilibrium price and quantity?

A) Price would increase, and quantity would decrease.
B) Price would decrease, and quantity would decrease.
C) Price would increase, and quantity would increase.
D) Price would decrease, and quantity would increase.

Answer 1

B

Question 2

If the cost of producing a good rises for sellers, then how will this affect the market equilibrium for that good?

A) ​Price will rise and quantity will fall.
B) ​Price will fall and quantity will rise.
C) ​Price and quantity will both rise.
D) ​Price and quantity will both fall.

Answer 2

A

Question 3

An increase in the demand for tattoos will lead to a:

A) higher price and a larger quantity sold.
B) lower price and a larger quantity sold.
C) higher price and a smaller quantity sold.
D) lower price and a smaller quantity sold

Answer 3

A

Question 4

Which of the following is the most likely effect of lower apple juice prices on the price and quantity purchased of orange juice, a substitute product?

A) The price of orange juice will increase, and the quantity purchased will fall.
B) The price of orange juice will fall, and the quantity purchased will increase.
C) The price of orange juice will increase, and the quantity purchased will increase.
D) The price of orange juice will fall, and the quantity purchased will fall.

Question 5

Each year around Valentine's Day, we would expect:

A) the demand for roses to increase.
B) the price of roses to increase.
C) the quantity of roses sold to increase.
D) all of these.

Question 6

If the supply of a good decreased, what would be the effect on the equilibrium price and quantity?

A) Price would increase, and quantity would decrease.
B) Price would decrease, and quantity would decrease.
C) Price would increase, and quantity would increase.
D) Price would decrease, and quantity would increase.

Question 7

Suppose that the average equilibrium monthly rental price of apartments and rooms in a college town had been steady at $600, but then the college expanded enrollment from 10,000 to 12,000. Suddenly there is a shortage of rental housing at the prevailing price of $600. Which of the following is most likely to be true? ​

A) ​The shortage occurred because demand increased, and a new market equilibrium will result in higher rental prices and more rental units available on the market.
B) ​The shortage occurred because supply increased, and a new market equilibrium will result in lower rental prices and fewer rental units available on the market.
C) ​The shortage occurred because demand decreased, and a new market equilibrium will result in lower rental prices and fewer rental units available on the market.
D) ​The shortage occurred because demand increased, and a new market equilibrium will result in higher rental prices and fewer rental units available on the market.

Question 8

A decrease in demand with the supply held constant leads to:

A) ​an increased equilibrium price and an increased equilibrium quantity.
B) ​a decreased equilibrium price and a decreased equilibrium quantity.
C) ​a decreased equilibrium price and an increased equilibrium quantity.
D) ​an increased equilibrium price and a decreased equilibrium quantity.

Question 9

If we observe a decrease in the price of a good and a decrease in the amount of the good bought and sold, this could be explained by a(an):

A) increase in the supply of the good.
B) increase in the demand for the good.
C) decrease in the demand for the good.
D) decrease in the supply of the good.

Question 10

Suppose that X and Y are substitutes. If the price of Y increases, how will this change the market equilibrium for X? ​

A) ​Equilibrium price and quantity both decline.
B) ​Equilibrium price and quantity both rise.
C) ​Equilibrium price declines, and equilibrium quantity rises.
D) Equilibrium price rises, and equilibrium quantity falls.​

Question 11

Suppose a new law requires all piercing studios to pass tougher licensing tests and to begin using more costly sterilization methods. Other things constant, this law would cause:

A) an increase in the supply of piercings and a lower price for piercings.
B) an increase in the supply of piercings and a higher price for piercings.
C) a decrease in the supply of piercings and a higher price for piercings.
D) a decrease in the supply of piercings and a lower price for piercings.

Question 12

If goods A and B are complements, and if the price of good B rises, how will this affect the market equilibrium for good A?

A) Price will rise and quantity will fall.
B) ​Price will fall and quantity will rise.
C) Price and quantity will both rise.
D) ​Price and quantity will both fall.

Question 13

Over a ten year period, the monthly charge for cellular phone service decreased from $120 per month to $30 per month. At the same time, the number of subscribers increased from less than 10 million to more than 75 million. Which of the following provides the best explanation for these changes?

A) An increase in consumer income over this ten year period
B) A reduction in the price of residential phone service, a substitute for cellular phone service
C) An increase in the wages of workers in the cellular phone industry
D) Technological improvements that reduced the cost of supplying cellular phone service

Question 14

After a hurricane in Florida knocked out the regional water supply for several days, the demand for bottled water increased sharply. In a market economy, how will this increase in demand affect the equilibrium price and quantity of bottled water?

A) Price will increase, and quantity will decrease.
B) Price will decrease, and quantity will decrease.
C) Price will decrease, and quantity will increase.
D) Price will increase, and quantity will increase.

Question 15

A decrease in demand leads to a (an):

A) increased equilibrium price and an increased equilibrium quantity.
B) decreased equilibrium price and a decreased equilibrium quantity.
C) decreased equilibrium price and an increased equilibrium quantity.
D) increased equilibrium price and a decreased equilibrium quantity.

Question 16

If we observe a decrease in the price of a good and an increase in the amount of the good bought and sold, this could be explained by a(n):

A) increase in the supply of the good.
B) increase in the demand for the good.
C) decrease in the demand for the good.
D) decrease in the supply of the good.

Question 17

If there is a decrease in demand for lettuce, we would expect:

A) both the price and quantity sold to increase.
B) both the price and quantity sold to decrease.
C) the price to decrease and the quantity sold to increase.
D) the price to increase and the quantity sold to decrease.

Question 18

How would a decrease in the price of the feed grains used to feed cattle affect the market for beef?

A) The demand for beef would increase, increasing beef prices.
B) The demand for beef would decrease, decreasing beef prices.
C) The supply of beef would increase, decreasing beef prices.
D) The supply of beef would decrease, increasing beef prices.

Question 19

How would a decrease in consumer income affect the market for new automobiles?

A) Demand would decrease, leading to an increase in price and a reduction in quantity sold.
B) Demand would decrease, leading to a reduction in price and a reduction in quantity sold.
C) Demand would increase, leading to an increase in price and an increase in quantity sold.
D) Demand would increase, leading to a reduction in price and an increase in quantity sold.

Question 20

An increased equilibrium price and a decreased equilibrium quantity results from a(an):

A) decrease in demand.
B) increase in supply.
C) decrease in supply.
D) increase in demand.

Question 21

Exhibit 4-2 Supply and demand curves ​
The market shown in Exhibit 4-2 is initially in equilibrium at E₃. Changes in market conditions result in a new equilibrium at E₄. This change is stated as a(n):

A) increase in demand and an increase in supply.
B) decrease in demand and a decrease in quantity supplied.
C) increase in quantity demanded and an increase in quantity supplied.
D) decrease in supply and a decrease in quantity demanded.
E) increase in supply and an increase in quantity demanded.

Question 22

Exhibit 4-2 Supply and demand curves ​
The market shown in Exhibit 4-2 is initially in equilibrium at point E₁. Union negotiations for workers producing good X result in a wage increase. Other things being equal, which of the following is the new equilibrium after this wage increase is in effect?

A) E₁.
B) E₂.
C) E₃.
D) E₄.

Question 23

Exhibit 4-3 Supply and demand curves
Initially the market shown in Exhibit 4-3 is in equilibrium at P₂, Q₂ (E₂). Changes in market conditions result in a new equilibrium at P₂, Q₄ (E₄). This change is stated as a(n):

A) increase in supply and an increase in demand.
B) increase in supply and a decrease in demand.
C) decrease in demand and a decrease in supply.
D) increase in demand with supply held constant at S₂.

Question 24

Exhibit 4-2 Supply and demand curves ​
In Exhibit 4-2 an increase in supply would cause a movement from which equilibrium point to another, other things being equal?

A) E₁ to E₂.
B) E₁ to E₃.
C) E₄ to E₁.
D) E₃ to E₄.

Question 25

A hurricane destroyed the peach crop in South Carolina. Shortly thereafter the price of peaches rose significantly. These events suggest that a(n):

A) decrease in the supply of peaches caused the price of peaches to rise.
B) increase in the supply of peaches caused the price of peaches to rise.
C) increase in demand caused the price of peaches to rise.
D) decrease in demand caused the price of peaches to rise.

Question 26

Which of the following would decrease the price of packaged hot dogs?

A) An increase in the price of hot dog buns, a complement to packaged hot dogs.
B) A decrease in the price of hamburger meat, a substitute for packaged hot dogs.
C) A technological advance that lowers the cost of producing packaged hot dogs.
D) All of these.

Question 27

Exhibit 4-2 Supply and demand curves ​
The market shown in Exhibit 4-2 is initially in equilibrium at E₁. Changes in market conditions result in a new equilibrium at E₂. This change is stated as a(n):

A) increase in supply and an increase in quantity demanded.
B) increase in supply and a decrease in demand.
C) decrease in supply and a decrease in quantity demanded.
D) increase in demand and an increase in supply.

Question 28

Exhibit 4-2 Supply and demand curves ​
In Exhibit 4-2, a decrease in quantity demanded would cause a movement from which equilibrium point to another, other things being equal?

A) E₁ to E₂.
B) E₁ to E₃.
C) E₄ to E₁.
D) E₃ to E₄.

Question 29

A technological breakthrough lowers the cost of manufacturing DVDs. As a result, the market changes to a new equilibrium because of a(n):

A) upward movement along the demand curve for DVDs.
B) rightward shift in the demand curve for DVDs.
C) rightward shift in the supply curve for DVDs.
D) shortage of DVDs.

Question 30

If you were a government official that wanted to raise the equilibrium price of milk, which of the following actions would you take?

A) Take milk from government storage and sell it.
B) Encourage farmers to produce more milk.
C) Subsidize purchases of dairy equipment.
D) Encourage farmers to produce less milk.

Question 31

If Congress decides to increase the tax per pack paid by sellers of cigarettes, other things being equal, the price of cigarettes will rise. This rise in prices can be attributed to a(n):

A) upward movement along the supply curve for cigarettes.
B) rightward shift of the supply curve for cigarettes.
C) upward movement along the demand curve for cigarettes.
D) leftward shift of the supply curve for cigarettes.

Question 32

Exhibit 4-2 Supply and demand curves ​
Beginning from an equilibrium at point E₁ in Exhibit 4-2, an increase in demand for good X, other things being equal, would move the equilibrium point to:

A) E₁, no change.
B) E₂.
C) E₃.
D) E₄.

Question 33

Exhibit 4-2 Supply and demand curves ​
In Exhibit 4-2, which of the following might cause a shift from S₁ to S₂?

A) A decrease in input prices.
B) A decrease in consumer prices.
C) An increase in input prices.
D) An increase in consumer income.

Question 34

Exhibit 4-1 Supply and demand data $$\begin{array} { | c | c | c | } \hline \text { Price } & \begin{array} { c } \text { Quantity } \\\text { demanded }\end{array} & \begin{array} { r } \text { Quantity } \\\text { supplied }\end{array} \\\hline \$ 1.00 & 500 & 50 \\1.50 & 450 & 150 \\2.00 & 400 & 250 \\2.50 & 300 & 300 \\3.00 & 150 & 350 \\\hline\end{array}$$ ?

-Exhibit 4-1 shows that at a price of $3.00,

A) the market is in equilibrium.
B) there will be excess quantity demanded.
C) there will be excess quantity supplied.
D) there is a price ceiling in effect.

Question 35

If you were a government official and wanted to raise the price of wheat, which of the following actions would you take?

A) Take wheat from government storage and sell it.
B) Encourage farmers to use more fertilizer.
C) Lower the price of rye.
D) Subsidize purchases of farm equipment.
E) Encourage farmers to grow less wheat.

Question 36

Exhibit 4-1 Supply and demand data $$\begin{array} { | c | c | c | } \hline \text { Price } & \begin{array} { c } \text { Quantity } \\\text { demanded }\end{array} & \begin{array} { r } \text { Quantity } \\\text { supplied }\end{array} \\\hline \$ 1.00 & 500 & 50 \\1.50 & 450 & 150 \\2.00 & 400 & 250 \\2.50 & 300 & 300 \\3.00 & 150 & 350 \\\hline\end{array}$$ ?

-In Exhibit 4-1, suppose that a reduction in the price of an important input used to produce the good causes an increase in quantity supplied of 150 units at every price level. Assuming that demand does not change, the new equilibrium price will be:

A) $1.00.
B) $1.50.
C) $2.00.
D) $2.50.

Question 37

Consider the market for grapes. An increase in the wage paid to grape pickers will cause the:

A) demand curve for grapes to shift to the right, resulting in a higher equilibrium price for grapes and a reduction in the quantity consumed.
B) demand curve for grapes to shift to the left, resulting in a lower equilibrium price for grapes and an increase in the quantity consumed.
C) supply curve for grapes to shift to the left, resulting in a lower equilibrium price for grapes and a decrease in the quantity consumed.
D) supply curve for grapes to shift to the left, resulting in a higher equilibrium price for grapes and a decrease in the quantity consumed.

Question 38

An increase in the price of plastic raises the cost of manufacturing DVDs. As a result, the market changes to a new equilibrium because of a(n):

A) surplus of DVDs.
B) increase in the demand for DVDs.
C) leftward shift in the demand curve for DVDs.
D) leftward shift in the supply curve for DVDs.

Question 39

A decrease in consumer income decreases the demand for compact discs. As a result of the change to a new equilibrium, there is a(n):

A) leftward shift of the supply curve.
B) rightward shift of the supply curve.
C) upward movement along the supply curve.
D) downward movement along the supply curve.

Question 40

If Congress decides to reduce the tax per pack paid by sellers of cigarettes, other things being equal, the equilibrium price of cigarettes will fall. This fall in the equilibrium price can be attributed to a(n):

A) upward movement along the supply curve for cigarettes.
B) rightward shift of the supply curve for cigarettes.
C) upward movement along the demand curve for cigarettes.
D) leftward shift of the supply curve for cigarettes.

Question 41

Which of the following would raise both the equilibrium price and the equilibrium quantity of strawberries?

A) A decrease in the demand for strawberries.
B) An increase in the demand for strawberries.
C) A decrease in the supply of strawberries.
D) An increase in the supply of strawberries.

Question 42

Exhibit 4-4 Supply and demand curves for good X
An increase in the wage rate paid to workers producing good X would be represented by which of the graphs in Exhibit 4-4?

A) Graph A.
B) Graph B.
C) Graph C.
D) None of these.

Question 43

Exhibit 4-5 Supply and demand curves for computers
​
Which of the following changes could cause the computer market to change as shown in Exhibit 4-5?

A) Lower costs for computer chips and motherboards.
B) The failure of several computer manufacturers.
C) Higher prices for computer software.
D) More features and greater ease of use.

Question 44

Suppose prices for new homes have risen, yet sales of new homes have also risen. We can conclude that:

A) the demand for new homes has risen.
B) the law of demand has been violated.
C) new firms have entered the construction industry.
D) construction firms must be facing higher costs.

Question 45

Exhibit 4-4 Supply and demand curves for good X
Which of the graphs in Exhibit 4-4 represents a decrease in the price of a factor of production?

A) Graph A.
B) Graph B.
C) Graph C.
D) None of these.

Question 46

Which of the following is the best description of the effects of an increase in the supply of bread?

A) Consumers will pay more for bread.
B) Bread prices will fall, and bread sales will rise.
C) A permanent surplus of bread will remain on the market.
D) Bakers will have higher marginal costs.

Question 47

Exhibit 4-4 Supply and demand curves for good X
An increase in the price of a complementary good would be represented in which of the graphs in Exhibit 4-4?

A) Graph A.
B) Graph B.
C) Graph C.
D) None of these.

Question 48

Exhibit 4-3 Supply and demand curves
Beginning from an equilibrium at point E₂ in Exhibit 4-3, an increase in demand for good X, other things being equal, would move the equilibrium point to:

A) E₁.
B) E₂.
C) E₃.
D) E₄.

Question 49

Exhibit 4-3 Supply and demand curves
In Exhibit 4-3, an increase in demand would cause a movement from which equilibrium point to another, other things being equal?

A) E₁ to E₂.
B) E₁ to E₃.
C) E₄ to E₁.
D) E₁ to E₄.

Question 50

Exhibit 4-3 Supply and demand curves
The market shown in Exhibit 4-3 is initially in equilibrium at E₄. Changes in market conditions result in a new equilibrium at E₃. This change is stated as a(n):

A) increase in supply and an increase in quantity demanded.
B) increase in supply and a decrease in demand.
C) decrease in supply and a decrease in quantity demanded.
D) increase in demand an increase in supply.

Question 51

Exhibit 4-3 Supply and demand curves
The market shown in Exhibit 4-3 is initially in equilibrium at point E₄. Union negotiations result in a wage increase. Other things being equal, which of the following is the new equilibrium after this wage increase is in effect?

A) E₁.
B) E₂.
C) E₃.
D) E₄.

Question 52

Exhibit 4-3 Supply and demand curves
In Exhibit 4-3, an increase in quantity supplied would cause a movement from which equilibrium point to another, other things being equal?

A) E₁ to E₂.
B) E₁ to E₄.
C) E₄ to E₁.
D) E₃ to E₄.

Question 53

Consider the market for chicken. Assuming that chicken and beef are substitutes, an increase in the price of beef will:

A) decrease the demand for chicken creating a lower price and a smaller amount of chicken purchased in the market.
B) decrease the supply of chicken creating a higher price and a smaller amount of chicken purchased in the market.
C) increase the demand for chicken creating a higher price and a greater amount of chicken purchased in the market.
D) increase the supply of chicken creating a lower price and a greater amount of chicken purchased in the market.

Question 54

A decrease in buyers' income, assuming good X is a normal good, combined with a decrease in the wage rate paid to workers producing good X would be represented by which of the following changes in equilibrium shown in Graph C of Exhibit 4-4?

A) E₁ to E₂.
B) E₁ to E₃.
C) E₃ to E₂.
D) E₁ to E₄.

Question 55

If the cost of fertilizer rises, then the price of corn will:

A) rise.
B) fall.
C) remain unchanged.
D) react unpredictably.

Question 56

Which of the following statements is true of a market?

A) An increase in demand, with no change in supply, will increase the equilibrium price and quantity.
B) An increase in supply, with no change in demand, will decrease the equilibrium price and the equilibrium quantity.
C) A decrease in supply, with no change in demand, will decrease the equilibrium price and increase the equilibrium quantity.
D) All of these.

Question 57

Exhibit 4-3 Supply and demand curves
In Exhibit 4-3, which of the following might cause a shift from S₂ to S₁?

A) A decrease in input prices.
B) An improvement in technology.
C) An increase in input prices.
D) An increase in consumer income.

Question 58

An increase in buyers' income, assuming good X is a normal good, combined with an increase in the wage rate paid to workers producing good X would be represented by which of the following changes in equilibrium shown in Graph C of Exhibit 4-4?

A) E₁ to E₂.
B) E₁ to E₃.
C) E₃ to E₂.
D) E₁ to E₃.
E) E₄ to E₁.

Question 59

Exhibit 4-3 Supply and demand curves
Initially the market shown in Exhibit 4-3 is in equilibrium at P₃, Q₃ (E₃). Changes in market conditions result in a new equilibrium at P₂, Q₂ (E₂). This change is stated as a:

A) decrease in demand and an increase in supply.
B) decrease in demand and a decrease in quantity supplied.
C) decrease in quantity demanded and an increase in quantity supplied.
D) decrease in quantity demanded and an increase in supply.

Question 60

Exhibit 4-4 Supply and demand curves for good X
Which of the graphs in Exhibit 4-4 illustrates an increase in buyers' income, assuming that good X is a normal good?

A) Graph A.
B) Graph B.
C) Graph C.
D) None of these.

Question 61

If consumers switch away from eating margarine at the same time that the number of margarine suppliers increases, then:

A) these two effects cancel each other out and there is no change in the margarine market equilibrium.
B) the demand curve shifts left and the supply curve shifts right.
C) there is a margarine price increase.
D) there is an excess demand for margarine.
E) the equilibrium quantity of margarine must increase.

Question 62

Exhibit 4-8 Demand and supply curves
​
In Exhibit 4-8, a movement from A to B in which price has decreased and quantity has increased is best explained by a(n):

A) increase in supply and demand.
B) decrease in supply and demand.
C) increase in supply that dominates a decrease in demand.
D) increase in demand that dominates a decrease supply.
E) decrease in demand that dominates an increase in supply.

Question 63

Exhibit 4-8 Demand and supply curves
​
In Exhibit 4-8, a movement from A to D is best described as a(n):

A) increase in the quantity demanded and an increase in supply.
B) increase in supply and demand.
C) increase in both the quantity demanded and supplied.
D) increase in the quantity supplied and in the demand.
E) decrease in the quantity demanded and a decrease in supply.

Question 64

An increase in both supply and demand causes which of the following?

A) Equilibrium price falls.
B) Equilibrium price rises.
C) Equilibrium price change is indeterminate.
D) Equilibrium quantity decreases.
E) Equilibrium quantity change is indeterminate.

Question 65

Exhibit 4-6 Demand and supply curves
​
In Exhibit 4-6, the demand curve has shifted from D₁ to D₂ and, simultaneously, the supply curve has shifted from S₁ to S₂. Describe these actions in this market.

A) Market supply has decreased, and market demand has increased.
B) Market supply has increased, and market demand has decreased.
C) Market supply has decreased, and market demand has decreased.
D) The quantity supplied has decreased, and the quantity demanded has increased.
E) Market supply has increased, and market demand has increased.

Question 66

Exhibit 4-7 Demand and supply schedules for movie tickets
? $$\begin{array} { | c | c | c | } \hline \text { Price } & \begin{array} { c } \text { Quantity } \\\text { Demanded }\end{array} & \begin{array} { c } \text { Quantity } \\\text { Supplied }\end{array} \\\hline \$ 10 & 200 & 500 \\8 & 240 & 470 \\6 & 370 & 420 \\4 & 390 & 390 \\2 & 410 & 310 \\\hline\end{array}$$

-In Exhibit 4-7, the equilibrium price of a movie ticket is:

A) $10.
B) $8.
C) $6.
D) $4.
E) $2.

Question 67

An increase in consumers' incomes will have what effect on the equilibrium in the restaurant meals market?

A) Price will increase, and quantity will increase.
B) Price will decrease, and quantity will increase.
C) Price will increase, and quantity will decrease.
D) Price will decrease, and quantity will decrease.
E) Price will increase, and quantity will stay the same.

Question 68

An increase in the wages paid to fishermen will have what effect on the fish market equilibrium?

A) Price will decrease, and quantity will decrease.
B) Price will increase, and quantity will increase.
C) Price will decrease, and quantity will increase.
D) Price will increase, and quantity will decrease.
E) Price and quantity will stay the same.

Question 69

Suppose the market for "soda X" is in equilibrium. If the FDA announced today that this soda has been proven to cause a fatal disease, what would be most likely to happen to the equilibrium price and equilibrium quantity of soda X?

A) Price increases and quantity increases
B) Price decreases and quantity increases
C) Price increases and quantity increases
D) Price decreases and quantity decreases
E) No change in price and quantity

Question 70

Ceteris paribus, if consumer tastes change so that more people are eating broccoli, then what will happen to the market equilibrium for cabbage, a substitute good for broccoli?

A) Price will increase, and quantity will increase.
B) Price and quantity will stay the same.
C) Price will decrease, and quantity will increase.
D) Price will increase, and quantity will decrease.
E) Price will decrease, and quantity will decrease.

Question 71

If the market demand and supply curves shift as given in Exhibit 4-6, the resulting new equilibrium will show a(n):

A) increase in market price and a decrease in the quantity exchanged.
B) decrease in market price and a decrease in the quantity exchanged.
C) increase in market price and an increase in the quantity exchanged.
D) decrease in market price and an increase in the quantity exchanged.
E) decrease in market price and no change in the quantity exchanged.

Question 72

If a government imposed price ceiling legally sets the price of beef below market equilibrium, which of the following will most likely happen?

A) The quantity of beef demanded will decrease.
B) The quantity of beef supplied will increase.
C) There will be a surplus of beef.
D) There will be a shortage of beef.

Question 73

If the market supply increases and, simultaneously, market demand decreases, the new equilibrium will show:

A) market price will decrease, and market quantity exchanged could increase, decrease, or remain unchanged.
B) market price will increase, and market quantity exchanged will decrease.
C) market price will increase, and the quantity exchanged could increase, decrease, or remain the same.
D) market price could increase, decrease, or remain the same, and quantity exchanged will increase.
E) market price will increase, decrease, or remain the same, and quantity exchanged will decrease.

Question 74

Ceteris paribus, an increase in the supply of a good causes which of the following?

A) Lowers the equilibrium price, and reduces the quantity bought and sold.
B) Raises the equilibrium price, and raises the quantity bought and sold.
C) Raises the equilibrium price, and increases the quantity bought and sold.
D) Lowers the equilibrium price, and increases the quantity bought and sold.
E) Equilibrium price and equilibrium quantity change are indeterminate.

Question 75

An increase in demand and a decrease in supply cause which of the following?

A) Equilibrium price change is indeterminate.
B) Equilibrium quantity decreases.
C) Equilibrium price falls.
D) Equilibrium price rises.
E) Equilibrium quantity increases.

Question 76

If market supply decreases and, simultaneously, market demand increases, the new equilibrium will show:

A) market price will decrease, and market quantity exchanged will increase.
B) market price will increase, and market quantity exchanged will decrease.
C) market price will increase, and the quantity exchanged could increase, decrease, or remain the same.
D) market price could increase, decrease, or remain the same, and quantity exchanged will increase.
E) market price will increase, decrease, or remain the same, and quantity exchanged will decrease.

Question 77

A price ceiling that sets the price of a good below market equilibrium will cause:

A) An increase in quantity demanded of the good.
B) A decrease in quantity supplied of the good.
C) A shortage of the good.
D) All of these.

Question 78

Exhibit 4-8 Demand and supply curves
​
In Exhibit 4-8, a movement from A to C is best described as a(n):

A) increase in the quantity supplied and an increase in the demand.
B) decrease in the quantity supplied and a decrease in demand.
C) decrease in the quantity supplied and an increase in demand.
D) decrease in the quantity demanded and a decrease in supply.
E) decrease in both quantity demanded and quantity supplied.

Question 79

Exhibit 4-8 Demand and supply curves
​
In Exhibit 4-8, a movement from A to B is best explained by:

A) an increase in income and in the number of suppliers.
B) an increase in the price of other goods.
C) an increase in the population.
D) a decrease in income and an improvement in the technology used to produce the good.
E) equilibrium quantity increases and the equilibrium price change is indeterminate.

Question 80

Exhibit 4-7 Demand and supply schedules for movie tickets
? $$\begin{array} { | c | c | c | } \hline \text { Price } & \begin{array} { c } \text { Quantity } \\\text { Demanded }\end{array} & \begin{array} { c } \text { Quantity } \\\text { Supplied }\end{array} \\\hline \$ 10 & 200 & 500 \\8 & 240 & 470 \\6 & 370 & 420 \\4 & 390 & 390 \\2 & 410 & 310 \\\hline\end{array}$$

-In Exhibit 4-7, a 100 decrease in quantity demanded at every price level would cause the new equilibrium price to become:

A) $10.
B) $8.
C) $6.
D) $4.
E) $2.