Deck 4: Equilibrium: Where Supply Meets Demand

Question 1

Which of the following five scenarios illustrate markets in action?
(i) You rent a book at the university bookstore.
(ii) You bargain at a street stall.
(iii) You mow your own lawn.
(iv) You get a manicure at a nail salon.
(v) You grow your own vegetables and consume them yourself.

A)(i), (ii), and (iii)
B)(i), (iii), and (v)
C)(iii) and (v)
D)(i), (ii), and (iv)

Answer 1

D

Question 2

A market is a

A)a place where governments decide what is sold.
B)set of demand curves for a product.
C)setting that brings together potential buyers and sellers.
D)set of supply curves for a product.

Answer 2

C

Question 3

A planned economy is an economy where

A)centralized decisions are made about what is produced, how, by whom, and who gets what.
B)decentralized decisions are made about what is produced, how, by whom, and who gets what.
C)the government does not have any role in decision making related to products, prices, and markets.
D)a surplus exists for all goods and services.

Answer 3

A

Question 4

A market economy is an economy where

A)the government makes decisions on what is produced, how it is produced, by whom and how much is allotted to each person.
B)each individual makes his or her production and consumption decisions and buys and sells in markets.
C)centralized decisions are the norm.
D)one individual makes decisions for the entire market.

Question 5

The difference between a centralized economy and a market economy is that

A)the centralized economy does not have any markets for goods and services, whereas a market economy has fully functioning markets.
B)governments make production decisions in a centralized economy, and individuals make production decisions in a market economy.
C)governments have maximum decision-making power in a centralized economy but have zero decision-making power in a market economy.
D)individuals make production decisions in a centralized economy, and the government makes production decisions in a market economy.

Question 6

A seller at a farmer's market wants $10 for a bag of 10 apples. You think his price is too high, so you counter with an offer of $6 for the bag. The seller then offers you a much smaller bag of five apples for $6. You bargain again, and the seller lets you buy the 10 apples for $8. This scenario is an example of:

A)a centrally planned market.
B)a shortage.
C)a market in action.
D)perfect competition.

Question 7

You buy two loaves of bread at a price set by the government. The price of the bread never changes, and it is the only kind of bread produced. This scenario is an example of a

A)centrally planned market.
B)shortage.
C)market-based economy.
D)perfectly competitive market.

Question 8

Equilibrium is the

A)point at which there is no tendency for change.
B)halfway point in a price range.
C)halfway point on a demand curve.
D)level of prices as set in a centralized economy.

Question 9

An equilibrium in a market occurs:

A)at the halfway point on a demand curve.
B)at the halfway point on the price axis.
C)when suppliers have sold all the goods and services that they have produced.
D)when the quantity supplied equals the quantity demanded.

Question 10

An equilibrium price is a price where the

A)demand curve is identical to the supply curve.
B)amount that buyers are willing to buy is equal to the amount that buyers are able to buy.
C)quantity demanded no longer changes.
D)quantity supplied equals the quantity demanded.

Question 11

An equilibrium price is:

A)the price that prevails when there is a shortage.
B)the price that prevails when quantity supplied is less than quantity demanded.
C)determined by the intersection of the demand and supply curves.
D)the price that occurs when there is a surplus.

Question 12

If a store runs a sale on a product to clear out its stock, we can conclude that:

A)there was a surplus of the product in the store.
B)there was a shortage of the product in the store.
C)the demand for the product is larger than the supply of the product.
D)the product must be very close to its expiration date.

Question 13

If Beyoncé concert tickets are sold out within five minutes of being released, we can conclude that

A)there is a control on how high the ticket prices can go.
B)there is a shortage of Beyoncé concert tickets in the market.
C)the price of the tickets is above the equilibrium price in the market.
D)the quantity supplied of Beyoncé concert tickets is more than the quantity demanded.

Question 14

Graphically, the equilibrium quantity can be identified as the:

A)maximum quantity that buyers are willing to buy.
B)quantity corresponding to the intersection of the demand and supply curves.
C)quantity corresponding to the intersection of the demand curve and the price axis.
D)maximum quantity that sellers are willing to sell.

Question 15

The Bangtan Boys (BTS) sold out their first US concert, almost as soon as the tickets became available. Moreover, tickets for the BTS tour were, on average, twice as expensive as tickets for Taylor Swift's 2018 Reputation tour. How can you explain this difference in ticket prices?

A)Consumers must prefer BTS to Taylor Swift.
B)There is a shortage of BTS tickets compared to Taylor Swift tickets.
C)The supply of BTS tickets is larger than the supply of Taylor Swift tickets.
D)The demand for BTS tickets is larger than the demand for Taylor Swift's tickets.

Question 16

You're shopping online, and you place an item in your virtual cart. Two days later, you return to the virtual cart to check out and find that the item is now more expensive. Assuming that the market is competitive, what could explain the price increase?

A)There is a shortage of the item.
B)There is decreased demand for the item.
C)There is a surplus of the item.
D)New sellers are offering the same product.

Question 17

You eat M&Ms every day. When you go to the store to buy some, you find that M&Ms are more expensive than they were last month. Which of the following could explain why M&Ms are more expensive?

A)Consumers are now purchasing fewer M&Ms compared to other types of chocolates.
B)A new robot has been installed at the Mars chocolate company that reduces the time needed to produce M&Ms by half.
C)A new study finds that the benefits of eating chocolate are not as great as previously thought.
D)The supply of cacao beans, used to produce chocolate, has fallen around the world.

Question 18

Grapes become more expensive in the market. Which of the following can explain the increase in price?

A)Farmers are now able to produce larger grapevine yields using the same level of inputs.
B)The government reduces fuel taxes, which lowers transportation costs.
C)Grape production is the same, but wine production has gone up, which requires more grapes.
D)Consumers are purchasing fewer grapes as opposed to other types of fruits.

Question 19

When quantity demanded exceeds quantity supplied, _____ exists.

A)a shortage
B)equilibrium
C)fixed demand
D)a surplus

Question 20

When quantity supplied exceeds quantity demanded, _____ exists.

A)a shortage
B)fixed supply
C)equilibrium
D)a surplus

Question 21

Graphically, shortages will always occur:

A)at the equilibrium price.
B)at prices below the equilibrium price.
C)at prices above the equilibrium price.
D)when the quantity supplied exceeds the quantity demanded.

Question 22

Surpluses always occur

A)at the equilibrium price.
B)at prices below the equilibrium price.
C)at prices above the equilibrium price.
D)when the quantity demanded exceeds the quantity supplied.

Question 23

At the local grocery store, the blueberry jam is less expensive than last month. Which of the following can explain why blueberry jam costs less now?

A)Consumers are now purchasing fewer jars of blueberry jam as compared to other types of jam.
B)Blueberry farms are negatively affected by the weather, and blueberries are in short supply.
C)A research article reports on the benefits of eating blueberries.
D)The grocery store is experiencing a shortage of blueberry jam.

Question 24

As a result of technological innovation, automated water pumps are being installed on the farms of Kenyan tomato farmers. As a result of the increased use of automated water pumps, the equilibrium price of tomatoes will:

A)rise, due to a rise in demand.
B)fall, due to a fall in demand.
C)rise, due to a fall in supply.
D)fall, due to a rise in supply.

Question 25

Suppose that you have a pumpkin stall at a farmer's market, and the Halloween season arrives. You know that your customers will want to buy many pumpkins to decorate their houses and make pumpkin pies. Which of the following is a likely result of this scenario?

A)You can charge a higher price per pumpkin.
B)You will wind up with many unsold pumpkins.
C)You will take fewer pumpkins to the market to sell.
D)You will be able to sell only the highest-quality pumpkins.

Question 26

At the store, Hershey's Kit Kat candy bars are now cheaper than usual. Which of the following explains why Kit Kats are cheaper?

A)There is an excess demand for Kit Kats.
B)There is a shortage of Kit Kats.
C)There is a surplus of Kit Kats.
D)There is an increase in the demand for Kit Kats.

Question 27

Use the table to answer the question.
What is the equilibrium price in this market?
$$\begin{array} { | l | l | l | } \hline \text { Price } & \begin{array} { l } \text { Quantity } \\\text { Demanded } \\\text { (units) }\end{array} & \begin{array} { l } \text { Quantity } \\\text { Supplied (units) }\end{array} \\\hline \$ 3 & 250 & 40 \\\hline \$ 5 & 220 & 80 \\\hline \$ 7 & 190 & 120 \\\hline \$ 9 & 160 & 160 \\\hline \$ 11 & 130 & 200 \\\hline \$ 13 & 100 & 240 \\\hline \$ 15 & 70 & 280 \\\hline\end{array}$$

A)$11
B)$3
C)$9
D)$7

Question 28

Use the table to answer the question.
What is the equilibrium quantity in this market?
$$\begin{array} { | l | l | l | } \hline \text { Price } & \begin{array} { l } \text { Quantity } \\\text { Demanded } \\\text { (units) }\end{array} & \begin{array} { l } \text { Quantity } \\\text { Supplied (units) }\end{array} \\\hline \$ 3 & 250 & 40 \\\hline \$ 5 & 220 & 80 \\\hline \$ 7 & 190 & 120 \\\hline \$ 9 & 160 & 160 \\\hline \$ 11 & 130 & 200 \\\hline \$ 13 & 100 & 240 \\\hline \$ 15 & 70 & 280 \\\hline\end{array}$$

A)70 units
B)160 units
C)250 units
D)200 units

Question 29

Use the table to answer the question.
At what price does this market experience a shortage of 140 units?
$$\begin{array} { | l | l | l | } \hline \text { Price } & \begin{array} { l } \text { Quantity } \\\text { Demanded } \\\text { (units) }\end{array} & \begin{array} { l } \text { Quantity } \\\text { Supplied (units) }\end{array} \\\hline \$ 3 & 250 & 40 \\\hline \$ 5 & 220 & 80 \\\hline \$ 7 & 190 & 120 \\\hline \$ 9 & 160 & 160 \\\hline \$ 11 & 130 & 200 \\\hline \$ 13 & 100 & 240 \\\hline \$ 15 & 70 & 280 \\\hline\end{array}$$

A)$3
B)$5
C)$13
D)$15

Question 30

Use the table to answer the question.
At what price does this market experience a shortage of 70 units?
$$\begin{array} { | l | l | l | } \hline \text { Price } & \begin{array} { l } \text { Quantity } \\\text { Demanded } \\\text { (units) }\end{array} & \begin{array} { l } \text { Quantity } \\\text { Supplied (units) }\end{array} \\\hline \$ 3 & 250 & 40 \\\hline \$ 5 & 220 & 80 \\\hline \$ 7 & 190 & 120 \\\hline \$ 9 & 160 & 160 \\\hline \$ 11 & 130 & 200 \\\hline \$ 13 & 100 & 240 \\\hline \$ 15 & 70 & 280 \\\hline\end{array}$$

A)$5
B)$7
C)$13
D)$15

Question 31

Use the table to answer the question.
At what price does this market experience a surplus of 70 units?
$$\begin{array} { | l | l | l | } \hline \text { Price } & \begin{array} { l } \text { Quantity } \\\text { Demanded } \\\text { (units) }\end{array} & \begin{array} { l } \text { Quantity } \\\text { Supplied (units) }\end{array} \\\hline \$ 3 & 250 & 40 \\\hline \$ 5 & 220 & 80 \\\hline \$ 7 & 190 & 120 \\\hline \$ 9 & 160 & 160 \\\hline \$ 11 & 130 & 200 \\\hline \$ 13 & 100 & 240 \\\hline \$ 15 & 70 & 280 \\\hline\end{array}$$

A)$7
B)$9
C)$11
D)$15

Question 32

Use the table to answer the question.
At what price does this market experience a surplus of 140 units?
$$\begin{array} { | l | l | l | } \hline \text { Price } & \begin{array} { l } \text { Quantity } \\\text { Demanded } \\\text { (units) }\end{array} & \begin{array} { l } \text { Quantity } \\\text { Supplied (units) }\end{array} \\\hline \$ 3 & 250 & 40 \\\hline \$ 5 & 220 & 80 \\\hline \$ 7 & 190 & 120 \\\hline \$ 9 & 160 & 160 \\\hline \$ 11 & 130 & 200 \\\hline \$ 13 & 100 & 240 \\\hline \$ 15 & 70 & 280 \\\hline\end{array}$$

A)$9
B)$11
C)$13
D)$15

Question 33

Use the table to answer the question.
What is the equilibrium price in this market?
$$\begin{array} { | l | l | l | } \hline \text { Price } & \begin{array} { l } \text { Quantity } \\\text { Demanded } \\\text { (units) }\end{array} & \begin{array} { l } \text { Quantity } \\\text { Supplied } \\\text { (units) }\end{array} \\\hline \$ 25 & 450 & 200 \\\hline \$ 30 & 420 & 220 \\\hline \$ 35 & 390 & 240 \\\hline \$ 40 & 360 & 260 \\\hline \$ 45 & 330 & 280 \\\hline \$ 50 & 300 & 300 \\\hline \$ 55 & 270 & 320 \\\hline \$ 60 & 240 & 340 \\\hline\end{array}$$

A)$60
B)$45
C)$35
D)$50

Question 34

Use the table to answer the question.
What is the equilibrium quantity in this market?
$$\begin{array} { | l | l | l | } \hline \text { Price } & \begin{array} { l } \text { Quantity } \\\text { Demanded } \\\text { (units) }\end{array} & \begin{array} { l } \text { Quantity } \\\text { Supplied } \\\text { (units) }\end{array} \\\hline \$ 25 & 450 & 200 \\\hline \$ 30 & 420 & 220 \\\hline \$ 35 & 390 & 240 \\\hline \$ 40 & 360 & 260 \\\hline \$ 45 & 330 & 280 \\\hline \$ 50 & 300 & 300 \\\hline \$ 55 & 270 & 320 \\\hline \$ 60 & 240 & 340 \\\hline\end{array}$$

A)240 units
B)100 units
C)300 units
D)330 units

Question 35

Use the table to answer the question.
At what price does this market experience a shortage of 50 units?
$$\begin{array} { | l | l | l | } \hline \text { Price } & \begin{array} { l } \text { Quantity } \\\text { Demanded } \\\text { (units) }\end{array} & \begin{array} { l } \text { Quantity } \\\text { Supplied } \\\text { (units) }\end{array} \\\hline \$ 25 & 450 & 200 \\\hline \$ 30 & 420 & 220 \\\hline \$ 35 & 390 & 240 \\\hline \$ 40 & 360 & 260 \\\hline \$ 45 & 330 & 280 \\\hline \$ 50 & 300 & 300 \\\hline \$ 55 & 270 & 320 \\\hline \$ 60 & 240 & 340 \\\hline\end{array}$$

A)$45
B)$50
C)$25
D)$55

Question 36

Use the table to answer the question.
At what price does this market experience a shortage of 100 units?
$$\begin{array} { | l | l | l | } \hline \text { Price } & \begin{array} { l } \text { Quantity } \\\text { Demanded } \\\text { (units) }\end{array} & \begin{array} { l } \text { Quantity } \\\text { Supplied } \\\text { (units) }\end{array} \\\hline \$ 25 & 450 & 200 \\\hline \$ 30 & 420 & 220 \\\hline \$ 35 & 390 & 240 \\\hline \$ 40 & 360 & 260 \\\hline \$ 45 & 330 & 280 \\\hline \$ 50 & 300 & 300 \\\hline \$ 55 & 270 & 320 \\\hline \$ 60 & 240 & 340 \\\hline\end{array}$$

A)$60
B)$30
C)$50
D)$40

Question 37

Use the table to answer the question.
At what price does this market experience a surplus of 100 units?
$$\begin{array} { | l | l | l | } \hline \text { Price } & \begin{array} { l } \text { Quantity } \\\text { Demanded } \\\text { (units) }\end{array} & \begin{array} { l } \text { Quantity } \\\text { Supplied } \\\text { (units) }\end{array} \\\hline \$ 25 & 450 & 200 \\\hline \$ 30 & 420 & 220 \\\hline \$ 35 & 390 & 240 \\\hline \$ 40 & 360 & 260 \\\hline \$ 45 & 330 & 280 \\\hline \$ 50 & 300 & 300 \\\hline \$ 55 & 270 & 320 \\\hline \$ 60 & 240 & 340 \\\hline\end{array}$$

A)$60
B)$30
C)$40
D)$50

Question 38

Use the table to answer the question.
At what price does this market experience a surplus of zero units?
$$\begin{array} { | l | l | l | } \hline \text { Price } & \begin{array} { l } \text { Quantity } \\\text { Demanded } \\\text { (units) }\end{array} & \begin{array} { l } \text { Quantity } \\\text { Supplied } \\\text { (units) }\end{array} \\\hline \$ 25 & 450 & 200 \\\hline \$ 30 & 420 & 220 \\\hline \$ 35 & 390 & 240 \\\hline \$ 40 & 360 & 260 \\\hline \$ 45 & 330 & 280 \\\hline \$ 50 & 300 & 300 \\\hline \$ 55 & 270 & 320 \\\hline \$ 60 & 240 & 340 \\\hline\end{array}$$

A)$60
B)$30
C)$40
D)$50

Question 39

The United Kingdom plans to end the use of gas-powered and diesel-powered cars by the year 2040. At the same time, car manufacturers, such as General Motors and Nissan, are increasing the number of electric car models they produce. Based on this information, which of the following statements is/are correct?
(i) If the supply of new electric cars is greater than the demand for new electric cars, then the price of electric cars will fall in the future.
(ii) The demand for gasoline will fall in the future.
(iii) The demand for electricity will rise in the future.
(iv) The demand for diesel will rise in the future.

A)only (i)
B)(i) and (ii)
C)(i), (ii), and (iii)
D)(ii) and (iv)

Question 40

You go to Starbucks and see that the price of your favorite tall vanilla latte has gone up by 25 cents. All sizes of the vanilla lattes are now more expensive. As a result of this price increase, you would expect to see a

A)fall in the demand for vanilla lattes.
B)fall in the quantity demanded of vanilla lattes.
C)rise in the demand for vanilla lattes.
D)rise in the quantity demanded of vanilla lattes.

Question 41

Cedar point amusement park reduces its entry fees. As a result of this price fall,

A)the demand will decrease.
B)the quantity demanded will be smaller.
C)the demand will rise.
D)the quantity demanded will be higher.

Question 42

At Trader Joe's, the price of chocolate chip cookies falls. As a result, you would expect to see

A)an increase in the demand for chocolate chip cookies.
B)a rise in the quantity demanded of chocolate chip cookies.
C)a decrease in the demand for chocolate chip cookies.
D)a drop in the quantity demanded of chocolate chip cookies.

Question 43

(Figure: Shift in Supply 1) Use the figure to answer the question.
Which of the following market changes would lead to a shift of the supply curve from Old supply to New supply?

A)Lower costs of transportation for the producers.
B)A smaller number of consumers for the product.
C)A decrease in consumer incomes.
D)An increase in consumer incomes.

Question 44

(Figure: Shift in Supply 2) Use the figure to answer the question.
Which of the following market changes would lead to a shift of the supply curve from Old supply to New supply?

A)An increase in production efficiency
B)An increase in the number of sellers for the product
C)An increase in the price of an input used in production
D)Fewer consumers in the market

Question 45

(Figure: Shift in Supply 2) Use the figure to answer the question.
Which of the following market changes would lead to a shift of the supply curve from Old supply to New supply?

A)Fewer sellers in the market.
B)A drop in the number of consumers for this product.
C)An expectation that future prices for the product will be lower.
D)A decrease in income taxes on consumers.

Question 46

(Figure: Shift in Supply 1) Use the figure to answer the question.
Which of the following events would lead to a shift of the supply curve from Old supply to New supply?

A)a natural disaster that causes a shutdown of production
B)increased taxation of raw materials used by producers
C)a decrease in the size of the market
D)technological advance in production techniques

Question 47

(Figure: Shift in Supply 2) Use the figure to answer the question.
Which of the following market changes would lead to a shift of the supply curve from Old supply to New supply?

A)A rise in the price of a product that is a substitute-in-production.
B)A fall in the price of a product that is a substitute-in-production.
C)An increase in the price of a product that is a complement-in-production.
D)An increase in production efficiency.

Question 48

(Figure: Shift in Supply 1) Use the figure to answer the question.
​
Which of the following market changes would lead to a shift of the supply curve from Old supply to New supply?

A)A fall in the price of a product that is a substitute-in-production.
B)A rise in the price of a product that is a substitute-in-production.
C)A rise in the price of a product that is a complement-in-production.
D)An increase in production efficiency.

Question 49

If there is a technological advance in the production of the Amazon Echo smart speaker, you would expect to see _____ overtime.

A)a rise in its equilibrium price
B)a fall in its equilibrium price
C)no change in its equilibrium price
D)a fall in the equilibrium quantity sold

Question 50

What affect will the release of the new Mercedes E-Class sedan have on last year's models that are still on the dealers' lots? Use supply and demand concepts to do your analysis.

A)The arrival of the new E-Class would lead to a decrease in demand for last year's model and their prices would fall.
B)The arrival of the new E-Class would cause the demand for the older model to fall to almost zero.
C)The arrival of the new E-Class would lead to an increase in demand for last year's model, and their prices would rise.
D)The arrival of the new E-Class would lead to an increased supply of last year's model, and their prices would fall.

Question 51

A new economic report discusses the high probability that sugar prices will rise soon. The expectation of sugar prices rising soon will lead to

A)decreased demand today and a fall in sugar prices.
B)increased supply today and a fall in sugar prices.
C)the government issuing subsidies for sugar production.
D)decreased supply today and a rise in sugar prices.

Question 52

If an aircraft is found to have software problems that could lead to a malfunction, the effect on the aircraft market will be that the

A)demand will increase, and the price of the aircraft will rise.
B)demand will remain unchanged.
C)supply will increase, and the price of the aircraft will fall.
D)demand will decrease, and the price of the aircraft will fall.

Question 53

(Figure: Shift in Demand 1) Use the figure to answer the question.
Which of the following market changes would lead to a shift of the demand curve from Old demand to New demand?

A)A technological improvement in the production of the product.
B)A lower cost of production for the product.
C)More sellers in the market.
D)Increase in popularity of the product by buyers.

Question 54

(Figure: Shift in Demand 2) Use the figure to answer the question.
Which of the following market changes would lead to a shift of the demand curve from Old demand to New demand?

A)An increase in the popularity of the product with consumers.
B)A fall in the price of a substitute product.
C)A fall in the price of a complementary product.
D)Fewer sellers in the market.

Question 55

(Figure: Shift in Demand 1) Use the figure to answer the question.
Which of the following market changes would lead to a shift of the demand curve from Old demand to New demand?

A)The publication of a report indicating the product is harmful.
B)A fall in the price of a substitute product.
C)Fewer sellers in the market.
D)A fall in the price of a complementary product.

Question 56

(Figure: Shift in Demand 2) Use the figure to answer the question.
Which of the following market changes would lead to a shift of the demand curve from Old demand to New demand?

A)A report is published noting that the product has adverse health effects.
B)There is a decrease in the price of a substitute product.
C)There is an increase in the number of consumers in the market for the product.
D)There is an improvement in production technology used by sellers.

Question 57

There are empty candy shelves at Walmart on the day before Halloween. Which of the following explains this event?

A)There is a rise in the equilibrium price of candy.
B)There is a surplus in the candy market.
C)There is a shortage in the candy market.
D)Walmart decided that kids should not have candy on Halloween.

Question 58

(Figure: Market for Shrimp) Use the figure to answer the question.
In 2018, Hurricane Michael hit Florida and destroyed some shrimp wholesale facilities. Which graph correctly depicts the effect of the hurricane on the equilibrium price and quantity in the shrimp market?

A)Graph A
B)Graph B
C)Graph C
D)Graph D

Question 59

(Figure: Market for Train Rides) Use the figure below to answer the question.
A major technological advancement occurs in transportation technology, which leads to faster and more efficient train systems. Which graph depicts the effect on the supply of train rides?

A)Graph A
B)Graph B
C)Graph C
D)Graph D

Question 60

(Figure: Market for Used Books) Use the figure to answer the question.
A campus bookstore sells both new and used books and rents them as well. In a particular semester, the percentage of students who opt for used books and rentals increases, and the percentage of students who opt for new books decreases. Which graph shows the new equilibrium that would result in the market for used books?

A)Graph A
B)Graph B
C)Graph C
D)Graph D

Question 61

(Figure: Market for Juice) Use the figure to answer the question.
You are studying the demand for Minute Maid and Tropicana orange juice. Minute Maid improves the taste of its juice and people start preferring Minute Maid over Tropicana. Which graph depicts the impact of these changes on both Minute Maid and Tropicana?

A)Graph A shows what happens in the market for Minute Maid, and Graph D shows what happens in the market for Tropicana.
B)Graph A shows what happens in the market for Minute Maid, and Graph B shows what happens in the market for Tropicana.
C)Graph B shows what happens in the market for Minute Maid, and Graph A shows what happens in the market for Tropicana.
D)Graph B shows what happens in the market for Minute Maid, and Graph D shows what happens in the market for Tropicana.

Question 62

(Figure: Market for Cars) Use the figure to answer the question.
In 2011, Japan suffered a major earthquake and tsunami. Honda parts that were sourced from Japan could no longer be produced, which caused Honda to cut its production of cars. Which graph shows the effect of this shortfall?

A)Graph A
B)Graph B
C)Graph C
D)Graph D

Question 63

(Figure: Market for Canadian Goods with US Inputs) Use the figure to answer the question.
The Canadian dollar has strengthened against the US dollar, meaning that it takes fewer Canadian dollars to purchase a US dollar. What will happen to the supply of Canadian goods that use inputs made in the US? Choose the graph that correctly depicts your answer.

A)Graph A
B)Graph B
C)Graph C
D)Graph D

Question 64

(Figure: Market for Canadian Goods with US Inputs) Use the figure to answer the question.
The Canadian dollar has weakened against the US dollar, meaning that it takes more Canadian dollars to purchase a US dollar. What will happen to the supply of Canadian goods that use inputs made in the US? Choose the graph that correctly depicts your answer.

A)Graph A
B)Graph B
C)Graph C
D)Graph D

Question 65

(Figure: Canadian Demand for Floridian Cruises) Use the figure to answer the question.
The Canadian dollar has weakened against the US dollar, meaning that it takes more Canadian dollars to purchase a US dollar. What will happen to the Canadian demand for US cruises from Florida? Choose the graph that correctly depicts your answer.

A)Graph A
B)Graph B
C)Graph C
D)Graph D

Question 66

(Figure: Canadian Demand for US designer goods) Use the figure to answer the question.
Canadians who live in border towns sometimes cross the border into the United States to buy goods and services from there. You find the Canadian dollar has strengthened against the US dollar, meaning that it takes fewer Canadian dollars to buy a US dollar. What would happen to the Canadian demand for US designer goods sold in the US? Choose the graph that depicts your answer.

A)Graph A
B)Graph B
C)Graph C
D)Graph D

Question 67

You are studying the international market for coffee. The world production of coffee beans increases, and at the same time, consumers worldwide start favoring tea over coffee. What is the effect on the equilibrium price and the equilibrium quantity in the coffee market?

A)The equilibrium price rises, and the equilibrium quantity falls.
B)The equilibrium price falls, and the equilibrium quantity rises.
C)The equilibrium price falls, and the change in the equilibrium quantity is ambiguous.
D)The equilibrium quantity falls, and the change in the equilibrium price is ambiguous.

Question 68

A growing number of utility companies are using drones for site inspections. What is the effect of these changes on the equilibrium price and quantity, in the market for drones?

A)Both the equilibrium price and the equilibrium quantity will rise.
B)The equilibrium price falls, and the equilibrium quantity rises.
C)The equilibrium price rises and the equilibrium quantity falls.
D)The equilibrium price rises and the change in equilibrium quantity is ambiguous.

Question 69

A new study discovers the health benefits of eating fish regularly. At the same time, some consumers decide to become vegetarians. What is the effect of these events on the equilibrium price and quantity in the fish market?

A)The equilibrium price rises, and the equilibrium quantity falls.
B)The equilibrium price falls, and the equilibrium quantity rises.
C)The equilibrium price falls, and the change in the equilibrium quantity is ambiguous.
D)The change in both the equilibrium price and quantity is ambiguous.

Question 70

What happens to the equilibrium price and equilibrium quantity when demand and supply increase simultaneously, but the relative size of the shifts are not known?

A)The equilibrium price rises, and the change in the equilibrium quantity is ambiguous.
B)The equilibrium price falls, and the change in the equilibrium quantity is ambiguous.
C)The equilibrium quantity rises, and the change in the equilibrium price is ambiguous.
D)The equilibrium quantity falls, and the change in the equilibrium price is ambiguous.

Question 71

What happens to the equilibrium price and quantity when demand decreases and at the same time supply increases, but the relative size of the shifts are not known?

A)The equilibrium price rises, and the change in the equilibrium quantity is ambiguous.
B)The equilibrium price falls, and the change in the equilibrium quantity is ambiguous.
C)The equilibrium quantity rises, and the change in the equilibrium price is ambiguous.
D)The equilibrium quantity falls, and the change in the equilibrium price is ambiguous.

Question 72

What happens to the equilibrium price and quantity when demand increases and simultaneously supply decreases, and the relative size of the shifts is not known?

A)The equilibrium price rises, and the change in the equilibrium quantity is ambiguous.
B)The equilibrium price falls, and the change in the equilibrium quantity is ambiguous.
C)The equilibrium quantity rises, and the change in the equilibrium price is ambiguous.
D)The equilibrium quantity falls, and the change in the equilibrium price is ambiguous.

Question 73

What happens to the equilibrium price and quantity when demand increases and at the same time supply decreases, but the demand shift is larger than the supply shift?

A)The equilibrium price rises, and the equilibrium quantity falls.
B)Both the equilibrium price and the equilibrium quantity rise.
C)The equilibrium price falls, and the equilibrium quantity rises.
D)Both the equilibrium price and the equilibrium quantity fall.

Question 74

What happens to the equilibrium price and quantity when demand increases and at the same time supply decreases, but the demand shift is smaller than the supply shift?

A)The equilibrium price rises, and the equilibrium quantity falls.
B)Both the equilibrium price and the equilibrium quantity will rise.
C)The equilibrium price falls, and the equilibrium quantity rises.
D)Both the equilibrium price and the equilibrium quantity will fall.

Question 75

What happens to the equilibrium price and quantity when demand decreases and at the same time supply increases, but the demand shift is relatively larger than the supply shift?

A)The equilibrium price rises, and the equilibrium quantity falls.
B)Both the equilibrium price and the equilibrium quantity will rise.
C)The equilibrium price falls, and the equilibrium quantity rises.
D)Both the equilibrium price and quantity will fall.

Question 76

What happens to the equilibrium price and quantity when demand decreases and at the same time supply increases, and the demand shift is relatively smaller than the supply shift?

A)The equilibrium price rises, and the equilibrium quantity falls.
B)Both the equilibrium price and quantity will rise.
C)The equilibrium price falls, and the equilibrium quantity rises.
D)Both the equilibrium price and quantity will fall.

Question 77

Shifts in supply

A)always lead to increases in equilibrium price.
B)lead to price and quantity to move in the same direction.
C)always lead to increases in equilibrium quantity.
D)lead to price and quantity to move in opposite directions.

Question 78

Shifts in demand

A)always lead to increases in equilibrium price.
B)lead to price and quantity to move in the same direction.
C)always lead to increases in equilibrium quantity.
D)lead to price and quantity to move in opposite directions.

Question 79

Saudi Arabia is a member of the Organization of the Petroleum Exporting Countries (OPEC). The countries in OPEC produce oil according to preset amounts (quotas). When Saudi Arabia cuts oil production, the

A)supply of crude oil will fall, and the prices of oil in world markets will rise.
B)supply of crude oil will rise, and the prices of oil in world markets will fall.
C)demand for crude oil will fall, and the prices of oil in world markets will rise.
D)demand for crude oil will fall, and the prices of oil in world markets will fall.

Question 80

Fish farmers find that a form of bacteria is negatively affecting the reproductive capability of the fish in the fish farms. Which graph depicts what will happen in the market for farmed fish?

A)Graph A

B)Graph B

C)Graph C

D)Graph D