Question 1

Refer to the demand and supply schedules for cups of coffee at CoolU. If the price is set at $0.80 per cup, what market condition exists and what is the likely effect on price?

Accepted Answer

A shortage; price will rise

Question 2

In the first graph provided (Figure 3.4.1), at price $$P_2$$, which of the following statements is NOT true?

Accepted Answer

The quantity demanded is $$Q_1$$

Question 3

Which of the following is an example of a market for goods?

Accepted Answer

Apple market

Question 4

Good A is considered a normal good if:

Accepted Answer

The demand for A increases when income rises

Question 5

Bottled water and health club memberships are best described as:

Accepted Answer

Complements

Question 6

Refer to the second graph (Figure 3.4.2). At a price of $10 per unit, what is the market condition?

Accepted Answer

There is a surplus of 400 units

Question 7

Refer to the market for car-seat heaters. What is the equilibrium price and quantity?

Accepted Answer

$60; 400 heaters per month

Question 8

If the number of suppliers of good Y increases, what happens to the supply curve?

Accepted Answer

The supply curve of good Y shifts rightward

Question 9

When the demand for good A increases, what happens to equilibrium price and quantity?

Accepted Answer

The equilibrium price and equilibrium quantity will increase

Question 10

When the supply of good A decreases, what is the effect on equilibrium price and quantity?

Accepted Answer

The equilibrium price will increase, but the equilibrium quantity will decrease

Question 11

Suppose the government sets a price ceiling below the equilibrium price for a good. What is the most likely outcome?

Accepted Answer

A shortage will occur

Question 12

If the price of a substitute for good X increases, what is the likely effect on the demand for good X?

Accepted Answer

The demand for good X will increase

Question 13

If the demand curve for a product shifts rightward while the supply curve remains unchanged, what happens to the equilibrium price and quantity?

Accepted Answer

Equilibrium price increases, equilibrium quantity increases

Question 14

Which of the following best describes the law of demand?

Accepted Answer

As the price of a good increases, the quantity demanded decreases

Question 15

A decrease in the price of a complement for good Z will cause:

Accepted Answer

The demand for good Z to increase

Question 16

If both the demand and supply for a product increase, what can be said about the equilibrium quantity?

Accepted Answer

It will definitely increase

Question 17

Suppose the supply curve for a good shifts leftward due to a natural disaster. What is the likely effect on equilibrium price and quantity?

Accepted Answer

Equilibrium price increases, equilibrium quantity decreases

Question 18

If the government imposes a tax on sellers, which curve shifts and in which direction?

Accepted Answer

The supply curve shifts leftward

Question 19

Which of the following is NOT a determinant of demand?

Accepted Answer

Production technology

Question 20

If a new technology reduces the cost of producing smartphones, what is the likely effect on the market for smartphones?

Accepted Answer

The supply curve shifts rightward, leading to a lower equilibrium price

Microeconomics: Demand, Supply, and Market Equilibrium Practice Guidance

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