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Exam 3: Demand, Supply, and Market Equilibrium

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Question 31

Multiple Choice

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Suppose that goods A and B are close substitutes. If the price of good A falls, then we would expect an

A) increase in the demand for A and an increase in the quantity of B demanded.
B) increase in the demand for A and a decrease in the quantity of B demanded.
C) increase in the quantity of A demanded and a decrease in the demand for B.
D) increase in the demand for good A as well as for good B.

E) A) and C)
F) B) and C)

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Question 32

Multiple Choice

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Refer to the above diagram of the market for corn. If the price in this market is at $4 per bushel, then there will be a

A) surplus and the price will tend to rise.
B) shortage and the price will tend to rise.
C) surplus and the price will tend to fall.
D) shortage and the price will tend to fall.

E) A) and B)
F) B) and C)

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Question 33

Multiple Choice

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The figure below shows three demand curves for coffee. An increase in the price of coffee, other factors constant, would cause a

If a legal ceiling price is set above the equilibrium price,

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. Consumer expectations that the price of X will rise sharply in the future will

Two months ago, the Maryville Shirt company sold 2,000 shirts at $30 per shirt. Last month the company raised its price to $35 per shirt and sold 3,000 shirts. Evidently the company experienced A(n)

$\begin{array} { | c | c | c | } \hline \text { Price Per Unit } & \text { Quantity Demanded Per Year } & \text { Quantity Supplied Per Year } \\\hline \$ 5 & 2,000 & 0 \\\hline 10 & 1,800 & 300 \\\hline 15 & 1,600 & 600 \\\hline 20 & 1,400 & 900 \\\hline 25 & 1,200 & 1,200 \\\hline 30 & 1,000 & 1,500 \\\hline\end{array}$ Refer to the above table. At a price of $15 per unit, which of the following would exist?

(Advanced analysis) The equation for the supply curve in the diagram shown is approximately

(Consider This) Suppose that salsa manufacturers sell 2 million bottles at $3.50 in one year and 3 million bottles at $3 in the next year. Based on this information, we can conclude that the

A news story states that "DVDs lose their appeal as consumers switch to online streaming for movies." In a competitive market for DVDs, this situation would lead to a(n)

If farmers withhold some of their current corn harvest from the market because they anticipate a higher price of corn in the near future, then this would cause a(n)

An improvement in production technology will

Allocative efficiency is concerned with

Refer to the figure above, which shows three supply curves for corn. Which of the following would cause the supply of corn to shift from S1 to S2?

If a price ceiling is set below the equilibrium price in a market,

An inferior good is

When the price of a product increases, a consumer is able to buy less of it with a given money income. This describes the

(Advanced analysis) The demand for commodity X is represented by the equation P = 10 - 0.2Q and supply by the equation P = 2 + 0.2Q. The equilibrium price for X is

Which would best explain a decrease in both the price and the quantity of a product over a period of time?

Refer to the above diagram illustrating the market for corn. If the price in this market is fixed at $2 per bushel, then