3.3 Market Equilibrium: Putting Demand and Supply Together
1) At market equilibrium,
A) demand equals supply.
B) quantity demanded equals quantity supplied.
C) surpluses are greater than shortages.
D) shortages are greater than surpluses.
2) At a product's equilibrium price
A) anyone who needs the product will be able to buy the product, regardless of ability to pay.
B) the federal government will provide the product to anyone who cannot afford it.
C) not all sellers who are willing to accept the price will find buyers for their products.
D) any buyer who is willing and able to pay the price will find a seller for the product.
Figure 3-3
3) Refer to Figure 3-3. The figure above shows the supply and demand curves for two markets: the market for original Michelangelo sculptures and the market for Ray Ban sunglasses. Which graph most likely represents which market?
A) Graph B represents the market for original Michelangelo sculptures and Graph A represents the market for Ray Ban sunglasses.
B) Graph A represents the market for original Michelangelo sculptures and Graph B represents the market for Ray Ban sunglasses.
C) Graph A represents both the market for original Michelangelo sculptures and Ray Ban sunglasses.
D) Graph B represents both the market for original Michelangelo sculptures and Ray Ban sunglasses.
4) Hurricane Katrina damaged a large portion of refining and pipeline capacity when it swept through the Gulf coast states in August 2005. As a result of this, many gasoline distributors were not able to maintain normal deliveries. At the pre-hurricane equilibrium price (i.e., at the initial equilibrium price), we would expect to see
A) a surplus of gasoline.
B) the quantity demanded equal to the quantity supplied.
C) a shortage of gasoline.
D) an increase in the demand for gasoline.
Figure 3-4
5) Refer to Figure 3-4. If the price is $25,
A) there would be a surplus of 300 units.
B) there would be a shortage of 300 units.
C) there would be a surplus of 200 units.
D) there would be a shortage of 200 units.
6) Refer to Figure 3-4. At a price of $25, how many units will be sold?
A) 400
B) 500
C) 600
D) 800
7) Refer to Figure 3-4. At a price of $25, how many units will be supplied?
A) 400
B) 500
C) 600
D) 800
8) Refer to Figure 3-4. If the current market price is $25, the market will achieve equilibrium 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.
9) Refer to Figure 3-4. At a price of $20, how many units will be sold?
A) 400
B) 500
C) 600
D) 800
10) Refer to Figure 3-4. At a price of $20, how many units will be supplied?
A) 400
B) 500
C) 600
D) 800
