Chapter 3 Demand, Supply, and Market Equilibrium

| February 14, 2018

2)
Figure 3.2 illustrates the supply and demand for t-shirts. If the actual price
of t-shirts is $15, there is an
A)
excess demand of 8 t-shirts.
B)
excess supply of 8 t-shirts.
C)
excess demand of 10 t-shirts.
D)
excess supply of 10 t-shirts.

3)
Figure 3.2 illustrates the supply and demand for t-shirts. If the actual price
of t-shirts is $7, we would expect that
A)
demand will decrease until quantity demanded equals quantity supplied.
B)
supply will increase until quantity demanded equals quantity supplied.
C)
price will increase until quantity demanded equals quantity supplied.
D)
there will be no change in the price since the market is in equilibrium.

4)
Figure 3.2 illustrates the supply and demand for t-shirts. If the actual price
of t-shirts is $15, we would expect that
A)
demand will decrease until quantity demanded equals quantity supplied.
B)
supply will increase until quantity demanded equals quantity supplied.
C)
price will decrease until quantity demanded equals quantity supplied.
D)
there will be no change in the price since the market is in equilibrium.

5)
Figure 3.2 illustrates the supply and demand for t-shirts. If the actual price
of t-shirts is $10, we would expect that
A)
demand will decrease until quantity demanded equals quantity supplied.
B)
supply will increase until quantity demanded equals quantity supplied.
C)
price will increase until quantity demanded equals quantity supplied.
D)
there will be no change in the price since the market is in equilibrium.

6)
What happens if the price of a product is below the equilibrium price?
A)
The buyers will stop purchasing a “cheap” product.
B)
The producer will lower the price to sell more product.
C)
There will be an excess demand for the product.
D)
There will be a surplus of the product.

7)
In the event of excess supply in the coffee market
A)
the price of coffee will increase.
B)
the price of coffee will decrease.
C)
the supply of coffee will decrease (supply will shift to the left) to meet the
demand.
D)
the demand for coffee will increase (demand will shift to the right) to meet
the supply.

8)
When consumers are willing to buy more than producers are willing to sell
A)
there is excess supply of the product in the market.
B)
there is excess demand for the product in the market.
C)
the market is in equilibrium.
D)
the demand curve will shift until the quantity supplied equals the quantity
demanded.

9)
Suppose that the quantity of cars demanded exceeds the quantity of cars
supplied. We would expect that
A)
the price of cars will increase.
B)
the price of cars will decrease.
C)
the supply will increase (supply will shift to the right) to meet the demand.
D)
the demand will decrease (demand will shift to the left) to meet the supply.

10)
Suppose that a market for a product is in equilibrium at a price of $5 per
unit. At any price above $5 per unit
A)
there will be an excess demand for the product.
B)
there will be an excess supply of the product.
C)
the quantity supplied of the product will be less than the quantity demanded of
that product.
D)
there will be a shortage of that product.

11)
The government sometimes creates an excess demand for a product by setting a
maximum price at which the product may be sold to consumers. This is sometimes
called a
A)
price ceiling.
B)
price floor.
C)
tax.
D)
subsidy.

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