Multiple Choice
Identify the
choice that best completes the statement or answers the question.
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1.
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Market equilibrium is the point where quantity
supplied and __________ are reasonably in balance.
a. | quantity demanded | b. | quantity price | c. | quantity
sold | d. | market price |
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2.
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After Hurricane Katrina, the supply curve for
gasoline
a. | shifted to the right. | b. | shifted to the left. | c. | reached
equilibrium. | d. | hit market
price. |
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3.
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Higher income usually means
a. | a shift to the left on the demand
curve. | b. | a static change on the demand
curve. | c. | higher demand. | d. | lower demand. |
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4.
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If supply increases, equilibrium
price
a. | falls. | b. | rises. | c. | remains
stable. | d. | reaches equilibrium
quantity. |
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5.
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If supply is inelastic, then a demand shift will
have a ____ effect on _______ than on quantity.
a. | smaller; demand | b. | smaller; price | c. | bigger;
demand | d. | bigger; price |
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6.
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An increase in supply is shown graphically as a
__________ shift of the supply curve, and as a result of an increase in supply, equilibrium price
will __________.
a. | rightward; decrease | b. | rightward; increase | c. | leftward;
decrease | d. | leftward;
increase |
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7.
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If financial aid were severely reduced, what would
happen to the equilibrium quantity of education supplied by educational institutions?
a. | The quantity supplied would
increase. | b. | The quantity supplied would remain
unchanged. | c. | The quantity
supplied would fall. | d. | The change in
quantity supplied would cause the quantity demanded to
increase. |
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8.
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In the short run, the quantity of available hotel
rooms is not particularly responsive to changes in price because hotels take time to build and to
destroy. This implies that the short-run supply of hotel rooms is
a. | elastic. | b. | inelastic. | c. | in
equilibrium. | d. | greater than
demand. |
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Exhibit 3-1
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9.
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Refer to Exhibit 3-1. Equilibrium price and quantity are
a. | $2 and 250 units. | b. | $4 and 150 units. | c. | $2 and 150
units. | d. | $6 and 250 units. | e. | none of the
above |
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10.
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Refer to Exhibit 3-1. At $2 the shortage equals _______ and price should ______
to restore equilibrium.
a. | 350 units; rise | b. | 200 units; rise | c. | 150 units;
fall | d. | 200 units; fall | e. | 150 units; rise |
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