Question 1

In 2007 the price of oil increased, which in turn caused the price of natural gas to rise. This can best be explained by saying that oil and natural gas are:

Accepted Answer

Oil and natural gas are substitute goods, so when the price of oil increased, consumers turned to natural gas as an alternative, increasing its demand and price.

Question 2

Refer to the above diagram, which shows three demand curves for coffee. Which would cause the change in the quantity of coffee demanded illustrated by the shift from point a to point b?

Accepted Answer

A

Question 3

Refer to the above diagram for good X. A shift from D₂ to D₁ would best be explained by:

Accepted Answer

C

Question 4

Refer to the above diagram for good R. A shift in the supply curve from S₂ to S₁ would best be explained by:

Accepted Answer

The answer of  Refer to the above diagram for...

Question 5

Assume a drought in the Great Plains reduces the supply of wheat. Since wheat is a basic ingredient in the production of bread and potatoes are a consumer substitute for bread, we would expect the price of wheat to:

Accepted Answer

A drought reduces wheat supply, increasing its price. This leads to a decrease in bread supply, raising bread prices and increasing demand for substitute goods like potatoes.

Question 6

Refer to the above data. Equilibrium price is:

Accepted Answer

The answer of  Refer to the above data. Equilibrium...

Question 7

- Refer to the above diagram. The equilibrium price and quantity in this market will be:

Accepted Answer

The equilibrium price and quantity are found at the intersection of the supply and demand curves. In this case, the equilibrium price is $1.00 and the equilibrium quantity is 200.

Question 8

-Refer to the above diagram. A surplus of 160 units would be encountered if price was:

Accepted Answer

A surplus occurs when the quantity supplied exceeds the quantity demanded at a given price. At $1.60, the quantity supplied is likely higher than the quantity demanded, resulting in a surplus of 160 units.

Question 9

- Refer to the above diagram. A shortage of 160 units would be encountered if price was:

Accepted Answer

A shortage occurs when the quantity demanded exceeds the quantity supplied. At a lower price like $0.50, the quantity demanded is likely higher than the quantity supplied, leading to a shortage.

Question 10

Refer to the above diagram, which shows demand and supply conditions in the competitive market for product X. Given D₀, if the supply curve moved from S₀ to S₁, then:

Accepted Answer

The answer of  Refer to the above diagram, which...

Question 11

- Refer to the above diagram, in which S₁ and D₁ represent the original supply and demand curves and S₂ and D₂ the new curves. In this market:

Accepted Answer

The answer of 
- Refer to the above diagram, in...

Question 12

- Refer to the above diagram, in which S₁ and D₁ represent the original supply and demand curves and S₂ and D₂ the new curves. In this market:

Accepted Answer

An increase in demand (shift from D1 to D2) has been more than offset by an increase in supply (shift from S1 to S2), leading to a lower equilibrium price and higher equilibrium quantity.

Question 13

-Refer to the above diagram, in which S₁ and D₁ represent the original supply and demand curves and S₂ and D₂ the new curves. In this market the indicated shift in supply may have been caused by:

Accepted Answer

The shift from S1 to S2 indicates an increase in supply, which can be caused by more efficient machinery reducing production costs.

Question 14

- Refer to the above diagram, in which S₁ and D₁ represent the original supply and demand curves and S₂ and D₂ the new curves. In this market the indicated shift in demand may have been caused by:

Accepted Answer

An increase in incomes would cause the demand for a normal good to increase, shifting the demand curve to the right from D1 to D2.

Question 15

In the following question you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X; (2) the equilibrium price (P) of X; and (3) the equilibrium quantity (Q) of X.
- An increase in income, if X is a normal good, will:

Accepted Answer

An increase in income will increase the demand for a normal good, leading to an increase in equilibrium price and quantity.

Question 16

In the following question you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X; (2) the equilibrium price (P) of X; and (3) the equilibrium quantity (Q) of X. 
-An increase in the price of a product that is a close substitute for X will:

Accepted Answer

An increase in the price of a close substitute for X will lead to an increase in the demand for X, as consumers switch to the relatively cheaper option. This increased demand will result in a higher equilibrium price and quantity for product X.

Question 17

In the following question you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X; (2) the equilibrium price (P) of X; and (3) the equilibrium quantity (Q) of X.
- A decrease in the number of consumers of product X will:

Accepted Answer

A decrease in the number of consumers leads to a decrease in demand (D) for product X, which in turn decreases the equilibrium price (P) and the equilibrium quantity (Q).

Question 18

In the following question you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X; (2) the equilibrium price (P) of X; and (3) the equilibrium quantity (Q) of X. 
-An increase in the tastes and preferences for X will:

Accepted Answer

An increase in tastes and preferences for product X will increase the demand for X, leading to a higher equilibrium price and a higher equilibrium quantity.

Question 19

In the following question you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X; (2) the equilibrium price (P) of X; and (3) the equilibrium quantity (Q) of X.
- An increase in the prices of resources used to produce X will:

Accepted Answer

An increase in the prices of resources used to produce X will decrease the supply of X because it becomes more expensive to produce. This decrease in supply will lead to an increase in the equilibrium price and a decrease in the equilibrium quantity.

Question 20

In the following question you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X; (2) the equilibrium price (P) of X; and (3) the equilibrium quantity (Q) of X.
- An improvement in the technology used to produce X will:

Accepted Answer

An improvement in technology typically increases supply (S) because it allows producers to produce more efficiently. This increase in supply leads to a decrease in the equilibrium price (P) and an increase in the equilibrium quantity (Q) of product X.

Quiz 3: Demand, Supply, and Market Equilibrium

In 2007 the price of oil increased, which in turn caused the price of natural gas to rise. This can best be explained by saying that oil and natural gas are:

Refer to the above diagram, which shows three demand curves for coffee. Which would cause the change in the quantity of coffee demanded illustrated by the shift from point a to point b?

Refer to the above diagram for good X. A shift from D2 to D1 would best be explained by:

Refer to the above diagram for good R. A shift in the supply curve from S2 to S1 would best be explained by:

Assume a drought in the Great Plains reduces the supply of wheat. Since wheat is a basic ingredient in the production of bread and potatoes are a consumer substitute for bread, we would expect the price of wheat to:

Refer to the above data. Equilibrium price is:

- Refer to the above diagram. The equilibrium price and quantity in this market will be:

-Refer to the above diagram. A surplus of 160 units would be encountered if price was:

- Refer to the above diagram. A shortage of 160 units would be encountered if price was:

Refer to the above diagram, which shows demand and supply conditions in the competitive market for product X. Given D0, if the supply curve moved from S0 to S1, then:

- Refer to the above diagram, in which S1 and D1 represent the original supply and demand curves and S2 and D2 the new curves. In this market:

- Refer to the above diagram, in which S1 and D1 represent the original supply and demand curves and S2 and D2 the new curves. In this market:

-Refer to the above diagram, in which S1 and D1 represent the original supply and demand curves and S2 and D2 the new curves. In this market the indicated shift in supply may have been caused by:

- Refer to the above diagram, in which S1 and D1 represent the original supply and demand curves and S2 and D2 the new curves. In this market the indicated shift in demand may have been caused by:

Refer to the above diagram for good X. A shift from D₂ to D₁ would best be explained by:

Refer to the above diagram for good R. A shift in the supply curve from S₂ to S₁ would best be explained by:

Refer to the above diagram, which shows demand and supply conditions in the competitive market for product X. Given D₀, if the supply curve moved from S₀ to S₁, then:

- Refer to the above diagram, in which S₁ and D₁ represent the original supply and demand curves and S₂ and D₂ the new curves. In this market:

- Refer to the above diagram, in which S₁ and D₁ represent the original supply and demand curves and S₂ and D₂ the new curves. In this market:

-Refer to the above diagram, in which S₁ and D₁ represent the original supply and demand curves and S₂ and D₂ the new curves. In this market the indicated shift in supply may have been caused by:

- Refer to the above diagram, in which S₁ and D₁ represent the original supply and demand curves and S₂ and D₂ the new curves. In this market the indicated shift in demand may have been caused by: