Question : Figure 3-4 11) Refer to Figure 3-4.  If the price $20, A) : 1388151

Figure 3-4

11) Refer to Figure 3-4.  If the price is $20,

A) there would be a surplus of 600 units.

B) there would be a shortage of 600 units.

C) quantity demanded is zero.

D) the market is in equilibrium.

Figure 3-5

12) Refer to Figure 3-5. At a price of $5,

A) there would be a surplus of 4 units.

B) there would be a scarcity of 4 units.

C) there would be a shortage of 6 units.

D) there would be a shortage of 4 units.

13) Refer to Figure 3-5. At a price of $0,

A) there would be a surplus of 8 units.

B) there would be a surplus of 0 units.

C) there would be a shortage of 0 units.

D) there would be a shortage of 8 units.

14) Refer to Figure 3-5. At a price of $15, the quantity sold

A) is 2 units.

B) is 4 units.

C) is 6 units.

D) cannot be determined.

15) Refer to Figure 3-5. At a price of $20, the quantity sold

A) is 0 units.

B) is 4 units.

C) is 8 units.

D) cannot be determined.

16) Refer to Figure 3-5. In a free market such as that depicted above, a shortage is eliminated by

A) a price increase, increasing the supply and decreasing the demand.

B) a price decrease, decreasing the supply and increasing the demand.

C) a price decrease, decreasing the quantity supplied and increasing the quantity demanded.

D) a price increase, increasing the quantity supplied and decreasing the quantity demanded.

17) Assume there is a surplus in the market for hybrid automobiles.  Which of the following statements correctly describes this situation?

A) The supply of hybrid automobiles is greater than the demand for hybrid automobiles.

B) Some consumers will be unable to obtain hybrid automobiles at the market price and will have an incentive to offer to buy the product at a higher price.

C) The price of hybrid automobiles will fall in response to the surplus; as the price falls the quantity demanded will increase and the quantity supplied will decrease.

D) the surplus will cause an increase in the equilibrium price of hybrid automobiles.

18) Which of the following describes a characteristic of a perfectly competitive market?

A) There are many buyers but few sellers.

B) There are many sellers but few buyers.

C) There are many buyers and sellers.

D) Equilibrium is achieved when demand for the product sold in the market equals the supply.

Figure 3-6

19) Refer to Figure 3-6.  The figure above represents the market for coffee grinders. Assume that the market price is $21.  Which of the following statement is true?

A) There is a shortage that will cause the price to increase; quantity demanded will then decrease and quantity supplied will increase until the price equals $25.

B) There is a shortage that will cause the price to increase; quantity supplied will then decrease and quantity demanded will increase until the price equals $25.

C) There will be a shortage that will cause the price to increase; demand will then decrease and supply will increase until the price equals $25.

D) There is a shortage that will cause the price to decrease; quantity demanded will then increase and quantity supplied will decrease until the price equals $25.

20) Refer to Figure 3-6.  The figure above represents the market for coffee grinders.  Assume that the price of coffee grinders is $50.  At this price:

A) the quantity supplied exceeds the quantity supplied by 100.  The price will eventually fall to $25 where quantity demanded will equal quantity supplied.

B) the supply exceeds the demand by 90. Some producers will have an incentive to offer to sell coffee grinders at a lower price. 

C) there is a surplus equal to 90 coffee grinders that will be eliminated when the price falls to $25.

D) there is a surplus equal to 90 coffee grinders and the price of coffee grinders will fall until demand is equal to supply.