Question 1

The graph illustrates the supply of sweaters. Which of the following events will increase the supply of sweaters?

Accepted Answer

An increase in the number of sellers of sweaters will increase the supply of sweaters, shifting the supply curve to the right. The other options would either decrease the supply (A, B, and E) or have no effect on supply (C).

Question 2

A surplus of cardboard boxes means that

Accepted Answer

A surplus of cardboard boxes means that there is excess supply in the market and the quantity supplied exceeds the quantity demanded at the current price. Therefore, option D is the correct answer. Option A would only apply if the current price were at the equilibrium price, which is not the case. Option B suggests that the price is too low, but there is no information to suggest this. Option C is the opposite, suggesting that demand exceeds supply, which is also not the case. Option E is not applicable since the information provided allows us to determine that there is a surplus.

Question 3

Suppose the current price of a kilogram of steak is $6 per kilogram and the equilibrium price is $9 per kilogram. What takes place?

Accepted Answer

At the current price of $6 per kilogram, quantity demanded exceeds quantity supplied, creating a shortage. This leads to a situation where consumers are willing to pay more than the current price of $6, which causes the price to rise. As the price rises, quantity demanded decreases due to the law of demand. Eventually, the market will reach a new equilibrium where quantity demanded equals quantity supplied at a price of $9 per kilogram.

Question 4

An increase in the number of producers of bird seed ________ the supply of bird seed and shifts the supply curve of bird seed ________.

Accepted Answer

An increase in the number of producers of bird seed would increase the supply of bird seed, leading to a rightward shift of the supply curve.

Question 5

When there is a shortage of parking spaces at your university, the

Accepted Answer

The quantity of parking spaces demanded is greater than the quantity of parking spaces supplied.

Question 6

Market equilibrium occurs when

Accepted Answer

Market equilibrium occurs when the quantity demanded equals the quantity supplied. This means that there is no excess demand or excess supply, and the market is stable at a certain price level.

Question 7

Assume a competitive market is in equilibrium. There is an increase in demand, but no change in supply. As a result the equilibrium price ________, and the equilibrium quantity ________.

Accepted Answer

An increase in demand shifts the demand curve to the right causing the equilibrium price and quantity to increase. This is because there is now more demand than supply at the current equilibrium price, so producers can increase the price and sell more products.

Question 8

Using the data in the table above, the equilibrium quantity and equilibrium price for a cellular smart phone is

Accepted Answer

The answer of  Using the data in the table...

Question 9

Market equilibrium i. can never occur because there are always people who want a good but cannot afford it.
Ii) occurs at the intersection of the supply and demand curves.
Iii) is the point where the price equals the quantity.

Accepted Answer

Market equilibrium occurs at the intersection of the supply and demand curves, where the quantity supplied equals the quantity demanded at a certain price. This does not necessarily mean the price equals the quantity, nor does it imply that market equilibrium cannot occur due to affordability issues.

Question 10

In the figure above, a price of $35 per dozen roses results in

Accepted Answer

The answer of  In the figure above, a price...

Question 11

In the figure above, a price of $15 per dozen roses results in

Accepted Answer

The answer of  In the figure above, a price...

Question 12

The graph illustrates the supply of sweaters. As the technology used to produce sweaters improves, the

Accepted Answer

The answer of  The graph illustrates the supply of...

Question 13

If a market begins in equilibrium and then the demand curve shifts leftward, a

Accepted Answer

When the demand curve shifts leftward, it means there is a decrease in demand at the original price, leading to a surplus of the product. This surplus is eliminated by a fall in price, which encourages more consumers to buy the product, restoring equilibrium.

Question 14

If there is a surplus of tacos, then the

Accepted Answer

If there is a surplus of tacos, it means that there are more tacos supplied than the quantity demanded by consumers. Therefore, the quantity of tacos demanded is less than the quantity of tacos supplied.

Question 15

The graph illustrates the supply of sweaters. A fall in the price of sweaters brings

Accepted Answer

The answer of  The graph illustrates the supply of...

Question 16

If the price is below the equilibrium price,

Accepted Answer

When the price is below the equilibrium price, the quantity demanded exceeds the quantity supplied, leading to a shortage.

Question 17

Using the data in the table above, at the price of $80 a phone,

Accepted Answer

At a price of $80, if the quantity supplied exceeds the quantity demanded, the difference between these two quantities represents a surplus. The specific numbers for supply and demand at this price point are not provided, but the correct answer is inferred based on the given choices and the definition of a market surplus.

Question 18

The above figure shows the market for t-shirts. If the price of t-shirts is $12, then

Accepted Answer

At a price of $12, the quantity demanded is only 400 while the quantity supplied is 800. This means there is a surplus of 400 t-shirts in the market. Whenever there is a surplus, sellers have to lower the price in order to get rid of the excess supply. Therefore, the price of t-shirts will fall.

Question 19

An increase in both the equilibrium price and quantity can be the result of

Accepted Answer

An increase in both equilibrium price and quantity can only occur when there is an increase in demand. This means that consumers are willing to pay higher prices and buy more of the good, leading to a new equilibrium point at a higher price and output level. A decrease in supply would lead to an increase in price but a decrease in quantity, while a decrease in demand would lead to a decrease in both price and quantity. An increase in supply would lower the equilibrium price but increase the quantity, so it cannot cause an increase in both price and quantity.

Question 20

Suppose the equilibrium price of oranges is $2.00 per kilogram. If the actual price is above the equilibrium price, a

Accepted Answer

When the actual price is above the equilibrium price, a surplus of oranges exists because suppliers are willing to sell more oranges than consumers are willing to buy at that price. To eliminate the surplus and restore equilibrium, the price will fall, not rise.

Quiz 4: Demand and Supply