Title: Equilibrium
Course: TEST Course

Q: The ________ is where quantity demanded and quantity supplied are equal at a certain price.
- surplus
- supply schedule
- equilibrium
A: equilibrium

Q: The point at which quantity demanded equals quantity supplied is called
- market stability.
- supply schedule.
- equilibrium.
A: equilibrium.

Q: If demand increases and supply remains constant, what happens to the market equilibrium?​
- Quantity rises and price falls.
- Quantity and price both fall.
- Quantity and price both rise.
A: Quantity and price both rise.

Q: If demand decreases and supply remains constant, what happens to the market equilibrium?​
- Quantity and price both rise.​
- Quantity and price both fall.
- Quantity rises and price falls.
A: Quantity rises and price falls.

Q: From an initial equilibrium, suppose there’s a decrease in supply. Once the market reaches its new equilibrium, there will be
- more transactions, and they will take place at a lower price.
- fewer transactions, and they will take place at a lower price.
- fewer transactions, and they will take place at a higher price.
A: fewer transactions, and they will take place at a higher price.

Q: From an initial equilibrium, suppose there’s a increase in demand. Once the market reaches its new equilibrium, there will be
- more transactions, and they will take place at a lower price.
- fewer transactions, and they will take place at a higher price.
- more transactions, and they will take place at a higher price.
A: more transactions, and they will take place at a higher price.

Q: When there is an excess supply of goods
- consumers demand more, causing the price to increase.
- the market increases its costs of production.
- suppliers lower prices, which encourages consumers to demand more.
A: suppliers lower prices, which encourages consumers to demand more.

Q: Excess supply will result in suppliers ________ prices, which encourages consumers to demand ________ .
- raising; less
- lowering; less
- lowering; more
A: lowering; more

Q: When there is an excess demand for a good
- consumers demand less, causing the price to increase.
- the market decreases its costs of production.
- suppliers increase prices, causing consumers to purchase less.
A: suppliers increase prices, causing consumers to purchase less.

Q: Excess demand will result in suppliers ________ prices, which encourages demanders to buy ________ .
- lowering; more
- lowering prices; less
- raising prices; less
A: raising prices; less

Q: When the actual price in some market is above the equilibrium price, the resulting market condition is known as
- excess demand.
- price ceiling.
- excess supply.
A: excess supply.

Q: Excess demand occurs when the actual price in some market is ________ the equilibrium price.
- above
- equal to
- below
A: below

Q: In a market with an upward sloping supply curve and a downward sloping demand curve, when there is an excess supply,
- the quantity demanded is higher than the equilibrium quantity.
- the actual price must be lower than the equilibrium price.
- the actual price must be higher than the equilibrium price.
A: the actual price must be higher than the equilibrium price.

Q: In a market with an upward sloping supply curve and a downward sloping demand curve, when the actual price must be higher than the equilibrium price, there will be
- excess demand.
- an increase in the price.
- excess supply.
A: excess supply.

Q: Analyze the following diagram:

At a price of $13, quantity demanded is ________, quantity supplied is ________ ; therefore excess ________ has occurred.
- 45, 27; supply
- 27, 45; demand
- 45, 27; demand
A: 45, 27; demand

Q: Analyze the following diagram:

At a price of $16, quantity demanded is ________, quantity supplied is ________; therefore excess ________ has occurred.
- 5, 35; demand
- 20, 40; supply
- 5, 35; supply
A: 5, 35; supply

Q: Becky is tasked with analyzing the market supply and demand for potatoes. Right now, she plotted the supply and demand curves for potatoes which you see in the graph. The current potato price is $150/ton. If the demand is at 120 million tons, what is the market situation for potatoes? How much must prices change before the market is in equilibrium?
- There is a potato shortage. The price must drop by $40/ton to reach equilibrium.
- There is a potato shortage. The price must increase by $40/ton to reach equilibrium.
- There is a potato surplus. The price must drop by $40/ton to reach equilibrium.
A: There is a potato surplus. The price must drop by $40/ton to reach equilibrium.

Q: Robert is tasked with analyzing the market supply and demand for potatoes. Right now, he plotted the supply and demand curves for potatoes which you see in the graph. The current potato price is $70/ton. If the demand is at 200 million tons, what is the market situation for potatoes? How much must prices change before the market is in equilibrium?
- There is a potato shortage. The price must drop by $40/ton to reach equilibrium.
- There is a potato surplus. The price must drop by $40/ton to reach equilibrium.
- There is a potato shortage. The price must increase by $40/ton to reach equilibrium.
A: There is a potato shortage. The price must increase by $40/ton to reach equilibrium.

Q: Analyze the following diagram:

The equilibrium price and quantity are:
- Pe = $8, Qe = 15
- Pe = $16, Qe = 5
- Pe = $14, Qe = 31
A: Pe = $14, Qe = 31

Q: Analyze the following diagram:

The price at which quantity demanded equals quantity supplied is ________ and the corresponding quantity is ________.
- $16, 35
- $8, 15
- $14, 31
A: $14, 31

Q: The conditions of demand and supply are given in the table below. What is the equilibrium price?

Price | Qd | Qs
$1.60 | 9,000 | 5,000
$2.00 | 8,500 | 5,500
$2.40 | 8,000 | 6,400
$2.80 | 7,500 | 7,500
$3.20 | 7,000 | 9,000
$3.60 | 6,500 | 11,000
$4.00 | 6,000 | 15,000
- $2.40
- $3.20
- $2.80
A: $2.80

Q: The conditions of demand and supply are given in the table below. What is the equilibrium quantity?

Price | Qd | Qs
$1.60 | 9,000 | 5,000
$2.00 | 8,500 | 5,500
$2.40 | 8,000 | 6,400
$2.80 | 7,500 | 7,500
$3.20 | 7,000 | 9,000
$3.60 | 6,500 | 11,000
$4.00 | 6,000 | 15,000
- 7,000
- 6,400
- 7,500
A: 7,500

Q: The marketing manager for the company Doggie Heaven Toys, has a table of prices and quantity demanded of the market for plastic ball throwing sticks for dog owners. He has plotted the quantity supplied upward sloping curve and now must plot the demand curve. Take a look at the table and identify which of the following demand curves will be the correct demand curve for his supply and demand graph.

Dog Ball Thrower Toy Market
Price ($) | Demanded | Supplied
$10 | 25 | 10
$20 | 20 | 20
$30 | 15 | 30
$40 | 10 | 40
$50 | 5 | 50
A: (a choice with no text)

Q: The marketing manager for the company Doggie Heaven Toys, has a table of prices and quantity demanded of the market for plastic ball throwing sticks for dog owners. He has plotted the quantity demanded downward sloping curve and now must plot the supply curve. Take a look at the table and identify which of the following supply curves will be the correct supply curve for his supply and demand graph.

Dog Ball Thrower Toy Market
Price ($) | Demanded | Supplied
$10 | 25 | 10
$20 | 20 | 20
$30 | 15 | 30
$40 | 10 | 40
$50 | 5 | 50
A: (a choice with no text)

Q: You are charged with setting the price for your company’s lawn mower product that has been on the market for a year and is lagging in sales. After researching and discovering the needed data you create a supply and demand curve. Here is what you have discovered.

and ends at (240,250). There is a blue downward sloping line that starts at (70,250) and ends at (240,150).) What sales price should you select to meet the equilibrium price for the lawn mower?
- $185
- $200
- $190
A: $190

Q: Nico is selecting the best quantity supplied for your company’s lawn mower product that has been on the market for a year. After researching and discovering the needed data Nico creates a supply and demand curve graph. Here is what he has discovered.

and ends at (240,250). There is a blue downward sloping line that starts at (70,250) and ends at (240,150).) What is the correct number of lawn mowers Nico should supply the market to meet equilibrium?
- 150
- 120
- 140
A: 140

Q: The market for hot dogs has been recently affected by a decrease in input prices. Following this change, how does the new equilibrium compare to the old?
- Equilibrium price and quantity increase.
- Equilibrium price and quantity decrease
- Equilibrium price decreases and quantity increases.
A: Equilibrium price decreases and quantity increases.

Q: What is the second step of the four-step process?
- Draw the demand and supply curves before the change took place.
- Identify the new equilibrium.
- Determine whether the economic changes affect demand or supply.
A: Determine whether the economic changes affect demand or supply.

Q: A major hurricane is headed towards Southern Florida and as a result panic buying has set in. What would you conclude about the third step of the four step process in this example?
- The new equilibrium price and quantity will both be higher than the original equilibrium.
- The economic change is likely to affect the demand curve.
- The economic change will shift the affected curve rightwards.
A: The economic change will shift the affected curve rightwards.

Q: What is the final step of the four-step process for analyzing changes in equilibrium?
- Identify the direction of change on the affected curve.
- Determine the old equilibrium price and quantity.
- Identify the new equilibrium, and compare it to the old.
A: Identify the new equilibrium, and compare it to the old.

Q: There has been a recent medical study released which confirms that vitamin C can kill off viruses and in fact stops sepsis in hospital patients so they can recover faster. With this new information what do you think will happen to the Vitamin C supplement market?
- There will be a decrease in the quantity demanded.
- There will be an increase only in the quantity demanded.
- There will be a shift if the demand curve as demand increases.
A: There will be a shift if the demand curve as demand increases.

Q: The largest national herbal supplement store is running a sale on its excess supply of Vitamin C supplements. With this new price change what do you think will happen to the Vitamin C supplement market?
- There will be a decrease in the quantity demanded.
- There will be a shift if the demand curve as demand increases.
- There will be an increase only in the quantity demanded.
A: There will be an increase only in the quantity demanded.

Q: Last year the Rocky Mountains received many snow storms and five months of snow which created a large demand in show shovels. This year however, there have been three snow storms and only a few weeks of winter snow. If you were to draw a graph of the current market for snow shovels, how would the new equilibrium price and quantity demanded compare to last year’s market?
- With supply of snow shovels being constant, the equilibrium price and quantity increase for snow shovels compared to last year.
- With supply of snow shovels being constant, equilibrium price decreases and quantity increases for snow shovels compared to last year.
- With supply of snow shovels being constant, equilibrium price and quantity decrease for snow shovels compared to last year.
A: With supply of snow shovels being constant, equilibrium price and quantity decrease for snow shovels compared to last year.

Q: Last year Hawaii did not received many rain storms and with eight months of little rain there was low demand for umbrellas. This year however, there have been three months of big rain storms and only a few weeks of sunny weather. If you were to draw a graph depicting the changing market for umbrellas from last year to this, how would the new equilibrium price and quantity demanded compare to last year’s market?
- With supply of umbrellas being constant, equilibrium price and quantity demanded decrease for umbrellas compared to last year.
- With supply of umbrellas being constant, equilibrium price decreases and quantity demanded increases for umbrellas compared to last year.
- With supply of umbrellas being constant, equilibrium price and quantity demanded increase for umbrellas compared to last year.
A: With supply of umbrellas being constant, equilibrium price and quantity demanded increase for umbrellas compared to last year.

Q: In 2016, after a hundred years of unsuccessful attempts, the Chicago Cubs finally won the baseball World Series. There was a surge in demand for Cubs baseball caps and T-shirts as more people became fans that year. At about the same time there was blight in the cotton fields that reduced the quantity of cotton to make the caps and T-shirts. Describe what the new equilibrium price and quantity is like compared with the prior year’s Cubs caps and T-shirt before the win and the reduced supply of cotton?
- With the demand shifting to the left, and supply shifting to the right, the equilibrium price and quantity for Cubs caps and T-shirts decreased from 2015.
- Supply and demand curves have shifted to the right and the equilibrium price and quantity for Cubs caps and T-shirts has increased since 2015.
- The demand curve shifted to the right, the supply curve shifted to the left, the equilibrium price for Cubs caps and T-shirts increased from 2015 and it is impossible to determine the effect on the quantity.
A: The demand curve shifted to the right, the supply curve shifted to the left, the equilibrium price for Cubs caps and T-shirts increased from 2015 and it is impossible to determine the effect on the quantity.

Q: In 2018 the NFL football team, the Carolina Panthers, have an owner accused of sexual harassment. The fans’ demand for team jerseys has dropped with the scandal this year. At about the same time the cost to manufacture the jerseys in China increased by 20%. Describe what the new equilibrium price and quantity is like compared with the prior year’s Panthers’ jersey market before the scandal and increased manufacturing costs?
- Supply and demand curves have shifted to the left and the equilibrium price and quantity for Panthers’ jersey market has decreased since 2017.
- The demand curve shifted to the right, the supply curve shifted to the left, the equilibrium price and quantity increased from 2017.
- Supply and demand curves have shifted to the left and the equilibrium quantity has decreased from 2017 but it is impossible to determine the effect on the equilibrium price.
A: Supply and demand curves have shifted to the left and the equilibrium quantity has decreased from 2017 but it is impossible to determine the effect on the equilibrium price.

Q: In 2000, the demand for audio CDs was increasing as more people purchased them to listen to during commute time. Later in the year the price of aluminium (a material used in CDs) decreased. In 2001 the iPod was launched. The new technology began shifting the market and downloading digital audio became a viable substitute for CDs. As digital technology has improved since 2001, downloading audio files continued to increase with the demand for CDs dropping. If you were drawing a supply and demand graph to illustrate the changes to the CD market between 2001 and 2011, what would you say has happened to the market and the equilibrium price and quantity of the CD market since 2001?
- With the demand shifting to the left, and supply shifting to the right, the equilibrium price and quantity for CDs decreased from 2001.
- Supply and demand curves have shifted to the left and the equilibrium price for CDs has decreased since 2001.
- The demand curve shifted to the left, and the supply curve shifted to the right, the equilibrium price for CDs decreased from 2001 and it is impossible to determine the effect on the quantity.
A: The demand curve shifted to the left, and the supply curve shifted to the right, the equilibrium price for CDs decreased from 2001 and it is impossible to determine the effect on the quantity.

Q: Silicon is used for the manufacturing of semiconductor chips. At the end of last year a large new source of silicon has been discovered this year and the price of silicon has decreased by 15%. Semiconductor chips are used in devices, cell phones, gaming systems, and this year many new devices are now using chips. If you were drawing a supply and demand graph to illustrate the changes to the semiconductor market since last year, what would you say has happened to the supply and demand curves and the equilibrium price and quantity this year?
- The supply of semiconductor chips will increase shifting the curve to the right and the demand curve shifts to the left with equilibrium quantity decreasing and the equilibrium price increasing.
- The supply curve will shift to the left and the demand curve shifts to the right with equilibrium quantity increasing and the equilibrium price increasing.
- Both the demand and supply of semiconductor chips will increase shifting the curves to the right with equilibrium quantity increasing but it is impossible to pinpoint the equilibrium price change.
A: Both the demand and supply of semiconductor chips will increase shifting the curves to the right with equilibrium quantity increasing but it is impossible to pinpoint the equilibrium price change.

Q: In 1973 Arab countries imposed an oil embargo on the United States and other developed countries in the aftermath of the Yom Kippur war. At the same time improved infrastructure and increased income was altering consumer preferences in favor of automobiles over public transportation. If you were drawing a supply and demand graph to illustrate the change in the gasoline market in 1973-1974, what would you say has happened to the supply and demand curves and the equilibrium price and quantity during this time period?
- The demand for gasoline will decrease shifting the curve to the left while the supply curve shifts to the right. As a result the equilibrium quantity will increase but it is impossible to pinpoint the equilibrium price change.
- The demand for gasoline will decrease shifting the curve to the left while the supply curve also shifts to the left. As a result the equilibrium price will increase but it is impossible to pinpoint the equilibrium quantity change.
- The supply of gasoline will decrease shifting the curve to the left while the demand curve shifts to the right. As a result the equilibrium price will increase but it is impossible to pinpoint the equilibrium quantity change.
A: The supply of gasoline will decrease shifting the curve to the left while the demand curve shifts to the right. As a result the equilibrium price will increase but it is impossible to pinpoint the equilibrium quantity change.

Q: Soon after America’s declaration of war on Japan the British colony of Malaya was overrun by advancing Japanese military forces. Malaya was the primary source of natural rubber to the US automobile industry before the war. At the same time demand for military vehicles has surged in response to massive government orders. Based on these facts, how would you predict the equilibrium price and quantity of vehicles to change after the fall of Malaya?
- The equilibrium quantity will increase but it impossible to determine the equilibrium price change without additional information.
- Both the equilibrium quantity and price will increase.
- The equilibrium price will increase but it is impossible to determine the equilibrium quantity change without additional information.
A: The equilibrium price will increase but it is impossible to determine the equilibrium quantity change without additional information.

Q: During the 1960s many high-profile studies purported to show a direct link between cigarette consumption and heart disease. In response to these studies the government began to implement higher cigarette taxes as well as other restrictions that increased the cost of doing business for major cigarette manufacturers. How would you expect supply, demand, and the equilibrium price and quantity to change?
- The demand for cigarettes would remain unchanged while supply shifts left. As a result the equilibrium quantity and price will decrease.
- The demand for cigarettes would decrease while supply shifts rightwards. As a result the equilibrium price decreases while equilibrium quantity is impossible to determine with the given information.
- The demand for cigarettes would decrease while supply shifts leftwards. As a result the equilibrium quantity decreases while equilibrium price is impossible to determine with the given information.
A: The demand for cigarettes would decrease while supply shifts leftwards. As a result the equilibrium quantity decreases while equilibrium price is impossible to determine with the given information.

Q: How would you need to shift the supply and demand curves in a market to result in a situation where equilibrium quantity increases while the equilibrium price change is indeterminate?
- Either supply or demand must increase.
- Supply must increase while demand decreases.
- Both supply and demand must increase.
A: Both supply and demand must increase.

Q: When quantity demanded decreases in response to a change in price
- the demand curve shifts to the right.
- the demand curve shifts to the left.
- there is a movement from one point to another along the demand curve.
A: there is a movement from one point to another along the demand curve.

Q: When quantity demanded increases in response to a change in price
- the demand curve shifts to the right.
- the demand curve shifts to the left.
- there is a movement from one point to another along the demand curve.
A: there is a movement from one point to another along the demand curve.

Q: The cost of leather used to produce leather jackets falls by 30%. This will result in ________.
- an increase in demand
- a decrease in demand
- an increase in the quantity demanded
A: an increase in the quantity demanded

Q: The cost of gasoline used to produce plastics increases by 30%. This will result in ________.
- an increase in demand
- an increase in the quantity demanded
- a decrease in quantity demanded
A: a decrease in quantity demanded

Q: It is the end of the year and holiday sales are beginning. To remain competitive the manufacturers of ice scrapers for cars run a buy two get one free sale on Black Friday. What effect will this have on the ice scraper market?
- This price change will decrease the quantity demanded.
- This decrease in price will increase demand.
- This decrease in price will increase the quantity demanded.
A: This decrease in price will increase the quantity demanded.

Q: This year the cost of iron used in manufacturing cars has increased by 15%. With the costs for manufacturing cars now up, what effect will this have on the car market?
- This will increase the quantity demanded.
- This will increase demand.
- This will decrease the quantity demanded.
A: This will decrease the quantity demanded.

Q: Back in 2008 the app Lightsaber Unleashed was very popular for iPhone users. As the years have gone on however, few updates were made and users lost interest in the app. What effect does the change in user interest have on the demand of the Lightsaber Unleashed app market?
- Loss of interest will decrease the quantity demanded.
- Loss of interest will increase demand.
- Loss of interest will decrease demand.
A: Loss of interest will decrease demand.

Q: There is a tax rebate that everyone in the nation receives from the government of $1000. The market for laptops notices a shift because of this. What effect will this rebate have on the laptop market?
- This will increase the quantity demanded.
- This will decrease the quantity demanded.
- This will increase demand.
A: This will increase demand.

Q: An increase in the quantity supplied can result from
- an increase in supply.
- decreased demand.
- an increase in price.
A: an increase in price.

Q: A decrease in the quantity supplied can result from
- a decrease in supply.
- increased demand.
- a decrease in price.
A: a decrease in price.

Q: Increased competition because of a greater number of producers will cause
- higher prices due to increased supply.
- greater demand in that market.
- lower prices due to an increase in the quantity supplied at every price.
A: lower prices due to an increase in the quantity supplied at every price.

Q: Decreased competition because of fewer producers in a market will cause
- lower prices due to decreased supply.
- less demand in that market.
- higher prices due to an decrease in the quantity supplied at every price.
A: higher prices due to an decrease in the quantity supplied at every price.

Q: This year three manufacturers of mattresses have closed shop and there is only one mattress manufacture left. With few additional competitors what will likely happen to the supply of mattresses?
- The quantity supplied will increase and cause a decrease in price of mattresses.
- The quantity demanded will decrease for mattresses.
- The quantity supplied will decrease and cause an increase in price of mattresses.
A: The quantity supplied will decrease and cause an increase in price of mattresses.

Q: This year nine national retail big box technology companies started and opened many retail stores across the nation. Now there are many more big box retail tech companies in the market. With many more competitors, what will likely happen to the supply of goods in the retail companies’ stores?
- The quantity supplied of goods will decrease and cause an increase in price of of goods.
- The quantity demanded for tech goods will decrease.
- The quantity supplied of goods will increase and cause a decreases in the price of goods.
A: The quantity supplied of goods will increase and cause a decreases in the price of goods.

Q: Coffee from Colombia last year was supplied at $9 per 10 pounds. This year the demand has decreased and that same supply of Colombia coffee is priced at $6 per 10 pounds. What will happen to supply of Colombian coffee this year?
- The supply curve will shift to the right.
- There will be an increase in quantity supplied.
- There will be a decrease in quantity supplied.
A: There will be a decrease in quantity supplied.

Q: Cocoa nibs from Nigeria last year was supplied at $9 per 10 pounds. This year the demand has increased and that same supply of Nigerian cocoa nibs is priced at $12 per 10 pounds. What will most likely happen to supply of Nigerian cocoa nibs this year?
- The supply curve will shift to the left.
- There will be a decrease in quantity supplied.
- There will be an increase in quantity supplied.
A: There will be an increase in quantity supplied.