Question 1

If sellers want to sell more products than buyers are willing to purchase, we know that:

Accepted Answer

If sellers want to sell more products than buyers are willing to purchase, it means that there is an excess supply of the product in the market, leading to a surplus. This, in turn, indicates that the current price is higher than what the equilibrium price should be. As a result, sellers might need to reduce the price to clear the surplus and reach the equilibrium point where quantity supplied equals quantity demanded. Therefore, option C is the correct choice. Option A, B, and D are incorrect because they suggest the opposite situation to the one described.

Question 2

Reference: Ref 4-1 (Figure: Equilibrium) Refer to the figure. The equilibrium price (in $) is:

Accepted Answer

A

Question 3

In free markets, surpluses lead to:

Accepted Answer

In a free market, surplus indicates that there is more supply than demand. To get rid of the excess supply, sellers often lower their prices which eventually leads to equilibrium in the market. Therefore, surpluses lead to lower prices in free markets.

Question 4

A market can be described by the equations Qd = 100 - P and Qs = P. What are the equilibrium price and quantity in this market?

Accepted Answer

To find the equilibrium price and quantity, we need to set the quantity demanded equal to the quantity supplied and solve for P.
Qd = Qs
100 - P = P
100 = 2P
P = 50
Substituting this back into either the demand or supply equation, we get:
Q = 100 - P = 100 - 50 = 50
Therefore, the equilibrium price is $50 and the equilibrium quantity is 50 units.

Question 5

Immediately after a hurricane, it is likely that the quantity demanded for tree cutting/removal services will ______ the quantity supplied, causing the price of tree cutting/removal services to ______.

Accepted Answer

After a hurricane, there is likely to be an increase in the demand for tree cutting/removal services due to fallen trees and debris. This increase in demand will cause the quantity demanded to exceed the quantity supplied, leading to an increase in the price of the service as companies may need to pay higher wages and use more resources to meet the higher demand. Therefore, the correct answer is C - exceed; rise.

Question 6

Suppose that the equilibrium price in the market is $10. If the current market price is $7.50:

Accepted Answer

The answer of Suppose that the equilibrium price in the...

Question 7

Accepted Answer

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Question 8

(Figure: Supply-Driven Price Change) Refer to the figure. When the supply curve shifts from S0 to S1, the equilibrium price rises to:

Accepted Answer

The answer of (Figure: Supply-Driven Price Change) Refer to the...

Question 9

Suppose that a market is characterized as follows: consumers are willing and able to purchase 100 units and sellers are willing and able to sell 70 units. Which of the following statements are true?

Accepted Answer

There is a shortage of 30 units because demand (100 units) exceeds supply (70 units). This imbalance means the market is not in equilibrium, and typically, prices will rise to restore equilibrium.

Question 10

Reference: Ref 4-2 (Figure: Market Equilibrium) Refer to the figure. At a price of $1, the market is characterized by a(n):

Accepted Answer

The answer of  Reference: Ref 4-2 (Figure: Market Equilibrium)...

Question 11

Reference: Ref 4-2 (Figure: Market Equilibrium) According to the figure, the equilibrium price and quantity are:

Accepted Answer

The answer of  Reference: Ref 4-2 (Figure: Market Equilibrium)...

Question 12

(Figure: Demand-Driven Price Change) Refer to the figure. When the demand curve shifts from D0 to D1, the equilibrium price rises to:

Accepted Answer

The answer of (Figure: Demand-Driven Price Change) Refer to the...

Question 13

In free markets, shortages lead to:

Accepted Answer

In free markets, shortages lead to higher prices because the demand for a product exceeds the available supply. As a result, sellers can charge more for the product, and buyers may be willing to pay a higher price in order to obtain the scarce item. This higher price incentivizes producers to increase their supply in order to capitalize on the higher profit margins.

Question 14

In a market, the equilibrium condition is given by the following:

Accepted Answer

The equilibrium condition in a market is when the quantity demanded equals the quantity supplied. This means that there is no excess supply or excess demand, which leads to a stable price and quantity in the market. Option A correctly represents this equilibrium condition. Option B is incorrect because it multiplies quantity demanded and quantity supplied, which does not provide meaningful information. Option C is incorrect because it divides quantity demanded by quantity supplied, which does not provide a clear indication of the equilibrium condition. Option D is incorrect because it involves multiplying price and quantity demanded, which is not necessary for defining the equilibrium condition.

Question 15

Reference: Ref 4-2 (Figure: Market Equilibrium) Refer to the figure. At a price of $3, quantity supplied is ______ and quantity demanded is ______, leading to a _______.

Accepted Answer

The answer of  Reference: Ref 4-2 (Figure: Market Equilibrium)...

Question 16

Which of the following statements is TRUE about equilibrium in markets? I. Demand always equals supply at equilibrium. II. Quantity demanded always equals quantity supplied at equilibrium. III. In a market diagram, demand and supply cross each other at the equilibrium point.

Accepted Answer

Statement I is not always true, as there can be instances where demand exceeds supply or vice versa at the equilibrium point. Statement II is true because when quantity demanded and quantity supplied are equal, the market is said to be in equilibrium. Statement III is also true as the equilibrium point is where the demand and supply curves intersect. Therefore, only statements II and III are true about equilibrium in markets.

Question 17

(Figure: Price Adjustment) Refer to the figure. If the price of the product is $14, there is a:

Accepted Answer

At a price of $14, the quantity demanded is 180 units and the quantity supplied is only 130 units, resulting in a shortage of 50 units. This shortage will put upward pressure on the price, causing it to rise to the equilibrium price of $16.

Question 18

The key condition for equilibrium to occur in a market is:

Accepted Answer

Equilibrium occurs when the quantity demanded by buyers equals the quantity supplied by sellers. This is represented graphically by the point where the demand curve intersects with the supply curve, known as the equilibrium price and quantity. Therefore, choice B is the correct answer. Choice A is not necessarily true as the demand and supply curves can intersect at multiple points, but only one point is the equilibrium. Choice C is not true as price and quantity are two different variables that are related in a market, but not equal. Choice D is not related to the concept of equilibrium in a market.

Question 19

A market can be described by the equations Qd = 50 - 3P and Qs = 2P. What are the equilibrium price and quantity in this market?

Accepted Answer

To find the equilibrium, set Qd = Qs: 50 - 3P = 2P. Solving for P gives P = 10. Substitute P = 10 into either equation to find Q: Q = 2(10) = 20.

Question 20

Reference: Ref 4-1 (Figure: Equilibrium) Refer to the figure. The equilibrium quantity (in units) is:

Accepted Answer

The answer of  Reference: Ref 4-1 (Figure: Equilibrium) Refer...

Quiz 4: Equilibrium: How Supply and Demand Determine Prices

If sellers want to sell more products than buyers are willing to purchase, we know that:

Reference: Ref 4-1 (Figure: Equilibrium) Refer to the figure. The equilibrium price (in $) is:

In free markets, surpluses lead to:

A market can be described by the equations Qd = 100 - P and Qs = P. What are the equilibrium price and quantity in this market?

Immediately after a hurricane, it is likely that the quantity demanded for tree cutting/removal services will the quantity supplied, causing the price of tree cutting/removal services to .

Suppose that the equilibrium price in the market is $10. If the current market price is $7.50:

(Figure: Supply-Driven Price Change) Refer to the figure. When the supply curve shifts from S0 to S1, the equilibrium price rises to:

Suppose that a market is characterized as follows: consumers are willing and able to purchase 100 units and sellers are willing and able to sell 70 units. Which of the following statements are true?

Reference: Ref 4-2 (Figure: Market Equilibrium) Refer to the figure. At a price of $1, the market is characterized by a(n) :

Reference: Ref 4-2 (Figure: Market Equilibrium) According to the figure, the equilibrium price and quantity are:

(Figure: Demand-Driven Price Change) Refer to the figure. When the demand curve shifts from D0 to D1, the equilibrium price rises to:

In free markets, shortages lead to:

In a market, the equilibrium condition is given by the following:

Reference: Ref 4-2 (Figure: Market Equilibrium) Refer to the figure. At a price of $3, quantity supplied is and quantity demanded is , leading to a ___.

Which of the following statements is TRUE about equilibrium in markets? I. Demand always equals supply at equilibrium. II. Quantity demanded always equals quantity supplied at equilibrium. III. In a market diagram, demand and supply cross each other at the equilibrium point.

(Figure: Price Adjustment) Refer to the figure. If the price of the product is $14, there is a:

The key condition for equilibrium to occur in a market is:

A market can be described by the equations Qd = 50 - 3P and Qs = 2P. What are the equilibrium price and quantity in this market?

Reference: Ref 4-1 (Figure: Equilibrium) Refer to the figure. The equilibrium quantity (in units) is: