Question 1

When the supply curve shifts out (to the right) and the demand curve shifts in (to the left), the equilibrium quantity will:

Accepted Answer

The equilibrium quantity is indeterminate because the increase in supply tends to increase quantity, while the decrease in demand tends to decrease quantity. The net effect depends on the relative magnitudes of the shifts.

Question 2

When the supply of surfboards increases and the demand for surfboards falls simultaneously, the price of surfboards will:

Accepted Answer

When the supply of surfboards increases and the demand for surfboards falls simultaneously, there will be an excess supply of surfboards in the market. As a result, sellers will try to attract buyers by reducing the price of surfboards, causing the price to fall.

Question 3

If supply increases and at the same time demand decreases, equilibrium price:

Accepted Answer

When supply increases, it tends to lower the equilibrium price, while a decrease in demand also tends to lower the equilibrium price. Therefore, the equilibrium price will decrease. However, the effect on equilibrium quantity is indeterminate because it depends on the relative magnitudes of the shifts in supply and demand.

Question 4

Markets form the foundation of all economic transactions.

Accepted Answer

Markets are the basic mechanism for organizing and coordinating economic activity. They provide a means for buyers and sellers to trade goods, services, and resources. Without markets, it would be difficult to allocate resources efficiently and to determine prices for goods and services.

Question 5

If both demand and supply decrease, but the decrease in demand is greater than the decrease in supply, then the equilibrium price _____ and equilibrium output _____.

Accepted Answer

If both demand and supply decrease, but the decrease in demand is greater than the decrease in supply, then the equilibrium price will fall and the equilibrium output will fall. This is because the decrease in demand will shift the demand curve to the left, and the decrease in supply will shift the supply curve to the right. The new equilibrium point will be at a lower price and a lower output level.

Question 6

If the supply curve shifts rightward, and the demand curve also shifts rightward, and if demand grows relatively less than supply, then price will:

Accepted Answer

When both supply and demand curves shift rightward, quantity will increase. However, if the supply increases more than demand, the price will fall.

Question 7

When the supply of coffee decreases and the demand for coffee increases simultaneously, the price of coffee will:

Accepted Answer

When the supply of coffee decreases and the demand for coffee increases simultaneously, there is a shortage of coffee. This shortage will cause an increase in the price of coffee as consumers are willing to pay more to obtain the limited supply. Therefore, the price of coffee will rise.

Question 8

Suppose in the market for iPhones, the following two changes take place: (1) the cost of making iPhones falls, and (2) the price of smart-phone data plans fall. What happens to the equilibrium price and the equilibrium quantity?

Accepted Answer

The cost reduction increases supply, lowering price and increasing quantity. The fall in data plan prices increases demand, raising both price and quantity. The equilibrium quantity definitely rises, but the price effect is indeterminate due to opposing forces.

Question 9

If both the supply and the demand curves shift to the right:

Accepted Answer

When both supply and demand increase, the equilibrium quantity will definitely increase, but the effect on equilibrium price depends on the relative magnitudes of the shifts in supply and demand.

Question 10

When the supply curve shifts out (to the right) and the demand curve shifts out (to the right), the equilibrium quantity will:

Accepted Answer

When both the supply and demand curves shift out to the right, the equilibrium quantity will increase. This is because the increase in supply will lead to a lower equilibrium price, which will in turn lead to an increase in the quantity demanded.

Question 11

When the supply curve shifts out (to the right) and the demand curve shifts out (to the right), the equilibrium price will:

Accepted Answer

When both supply and demand curves shift to the right, the equilibrium quantity will definitely increase, but the effect on equilibrium price is indeterminate without knowing the relative magnitudes of the shifts.

Question 12

If the supply curve shifts leftward and the demand curve also shifts leftward, and if demand shrinks relatively less than supply, then price will:

Accepted Answer

When both supply and demand decrease, the quantity will definitely fall. However, if demand decreases less than supply, the reduction in supply will have a stronger effect on price, causing it to rise.

Question 13

In general, economic markets only contain legal activity conducted by incorporated businesses.

Accepted Answer

Economic markets include both legal and illegal activities and involve various types of entities, not just incorporated businesses.

Question 14

If both demand and supply decrease, but the decrease in supply is greater than the decrease in demand, then the equilibrium price _____ and equilibrium output _____.

Accepted Answer

When both demand and supply decrease, but the decrease in supply is greater than the decrease in demand, the equilibrium price rises due to the larger reduction in supply, and the equilibrium output falls because both demand and supply have decreased.

Question 15

The supply of coffee has increased twice as much as the demand for coffee. As a result, we can predict a(n):

Accepted Answer

The answer of The supply of coffee has increased twice...

Question 16

Suppose in the market for iPhones, the following two changes take place: (1) the cost of making iPhones rises, and (2) customers begin to prefer Android-platform smart phones over iPhones. What happens to equilibrium price and equilibrium quantity?

Accepted Answer

When the cost of making iPhones rises, the supply curve shifts to the left, leading to a higher equilibrium price and a lower equilibrium quantity. However, when customers begin to prefer Android-platform smartphones over iPhones, the demand for iPhones decreases, shifting the demand curve to the left. This leads to a lower equilibrium price but also a lower equilibrium quantity. The combined effect on the equilibrium price is indeterminate because one factor pushes the price up while the other pushes it down. However, both effects lead to a lower equilibrium quantity.

Question 17

A market is a physical location that enables buyers and sellers to interact and transact with one another.

Accepted Answer

A market can be both a physical location and a virtual space where buyers and sellers interact and transact with one another, such as online marketplaces.

Question 18

Markets bring buyers and sellers together to conduct transactions.

Accepted Answer

Markets serve as a platform for buyers and sellers to interact and exchange goods and services or financial assets.

Question 19

When the supply curve shifts out (to the right) and the demand curve shifts in (to the left), the equilibrium price will:

Accepted Answer

When the supply curve shifts right, it indicates an increase in supply, which tends to lower prices. Simultaneously, when the demand curve shifts left, it indicates a decrease in demand, which also tends to lower prices. Therefore, the equilibrium price will decrease.

Question 20

What would be the effect on the equilibrium price and equilibrium quantity of new housing if mortgage interest rates rise and the costs of building a house rise simultaneously?

Accepted Answer

When mortgage interest rates rise, the demand for new housing decreases, leading to a potential decrease in the equilibrium price and quantity. Simultaneously, if the costs of building a house rise, the supply of new housing decreases, leading to a potential increase in the equilibrium price and a decrease in the equilibrium quantity. The combined effect makes the direction of the change in equilibrium price uncertain (it could increase, decrease, or stay the same depending on the relative magnitudes of the shifts in demand and supply), but the equilibrium quantity will unambiguously fall due to both demand and supply shifts.

Quiz 3: Supply and Demand

When the supply curve shifts out (to the right) and the demand curve shifts in (to the left) , the equilibrium quantity will:

When the supply of surfboards increases and the demand for surfboards falls simultaneously, the price of surfboards will:

If supply increases and at the same time demand decreases, equilibrium price:

Markets form the foundation of all economic transactions.

If both demand and supply decrease, but the decrease in demand is greater than the decrease in supply, then the equilibrium price _ and equilibrium output _.

If the supply curve shifts rightward, and the demand curve also shifts rightward, and if demand grows relatively less than supply, then price will:

When the supply of coffee decreases and the demand for coffee increases simultaneously, the price of coffee will:

Suppose in the market for iPhones, the following two changes take place: (1) the cost of making iPhones falls, and (2) the price of smart-phone data plans fall. What happens to the equilibrium price and the equilibrium quantity?

If both the supply and the demand curves shift to the right:

When the supply curve shifts out (to the right) and the demand curve shifts out (to the right) , the equilibrium quantity will:

When the supply curve shifts out (to the right) and the demand curve shifts out (to the right) , the equilibrium price will:

If the supply curve shifts leftward and the demand curve also shifts leftward, and if demand shrinks relatively less than supply, then price will:

In general, economic markets only contain legal activity conducted by incorporated businesses.

If both demand and supply decrease, but the decrease in supply is greater than the decrease in demand, then the equilibrium price _ and equilibrium output _.

The supply of coffee has increased twice as much as the demand for coffee. As a result, we can predict a(n) :

Suppose in the market for iPhones, the following two changes take place: (1) the cost of making iPhones rises, and (2) customers begin to prefer Android-platform smart phones over iPhones. What happens to equilibrium price and equilibrium quantity?

A market is a physical location that enables buyers and sellers to interact and transact with one another.

Markets bring buyers and sellers together to conduct transactions.

When the supply curve shifts out (to the right) and the demand curve shifts in (to the left) , the equilibrium price will:

What would be the effect on the equilibrium price and equilibrium quantity of new housing if mortgage interest rates rise and the costs of building a house rise simultaneously?