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Exam 4: Equilibrium: Where Supply Meets Demand

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Question 81

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You're shopping online, and you place an item in your virtual cart. Two days later, you return to the virtual cart to check out and find that the item is now more expensive. Assuming that the market is competitive, what could explain the price increase?

A) There is a shortage of the item.
B) There is decreased demand for the item.
C) There is a surplus of the item.
D) New sellers are offering the same product.

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Question 82

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Consider the local market for fast food hamburgers, an inferior good. If more fast food restaurants open, while consumers' incomes increase, the equilibrium price will be _____, and the equilibrium quantity will be _____.

A) higher; ambiguous
B) lower; ambiguous
C) ambiguous; higher
D) ambiguous; lower

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Question 83

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(Figure: Shift in Supply 2) Use the figure to answer the question. Which of the following market changes would lead to a shift of the supply curve from Old supply to New supply?

What happens to the equilibrium price and quantity when demand decreases and at the same time supply increases, but the relative size of the shifts are not known?

The cost of sensors used in making radio frequency identification (RFID) chips falls, while a successful ad campaign makes using "tap" technology in credit card usage more fashionable. As a result, the equilibrium price of RFID chips _____, and the equilibrium quantity _____.

If there is a technological advance in the production of the Amazon Echo smart speaker, you would expect to see _____ overtime.

When quantity supplied exceeds quantity demanded, _____ exists.

You are studying the market for a particular brand of perfume. You notice that a couple of changes are happening in the market at the same time. The flower that creates the perfume scent has been affected by a disease. In addition, consumers begin to worry about the safety of the ingredients that are used in the perfume. What do you expect will happen to the equilibrium price and the equilibrium quantity? Explain your answer.

You notice that the price of notebooks falls and that the quantity of notebooks sold increases. You suspect that the _____ notebooks shifts to the _____.

(Figure: The Demand and Supply of Quinoa) Use Figure: The Demand and Supply of Quinoa. If there is an increase in demand of 2,000 bushels per period at each price, the equilibrium price and quantity will be _____ and _____ bushels per period, respectively.

A hurricane is expected to hit the Carolinas. Why might the prices of batteries, candles, and bottled water rise?

An increase in price and an ambiguous change in quantity are MOST likely caused by:

(Figure: The Demand and Supply of Quinoa) Use Figure: The Demand and Supply of Quinoa. A price of _____ will result in a _____.

Shifts in supply

The following data shows the monthly demand and supply of wild-caught fish from the seafood market. (i) What is the equilibrium price per pound of wild-caught fish? (ii) What is the equilibrium quantity of wild-caught fish? (iii) At the price of $5.99 per pound, is there a shortage or a surplus of wild-caught fish, and what is the amount of the shortage or surplus? (iv) At the price of $11.99 per pound, is there a shortage or a surplus of wild-caught fish, and what is the amount of the shortage or surplus? $\begin{array} { | l | l | l | } \hline \begin{array} { l } \text { Price per Pound } \\\text { of Wild-Caught } \\\text { Fish }\end{array} & \begin{array} { l } \text { Quantity } \\\text { Demanded } \\\text { (pounds) }\end{array} & \begin{array} { l } \text { Quantity } \\\text { Supplied } \\\text { (pounds) }\end{array} \\\hline \$ 5.99 & 1,550 & 550 \\\hline \$ 6.99 & 1,450 & 700 \\\hline \$ 7.99 & 1,350 & 850 \\\hline \$ 8.99 & 1,250 & 1,000 \\\hline \$ 9.99 & 1,150 & 1,150 \\\hline \$ 10.99 & 1,050 & 1,300 \\\hline \$ 11.99 & 950 & 1,450 \\\hline \$ 12.99 & 850 & 1,600 \\\hline\end{array}$

What affect will the release of the new Mercedes E-Class sedan have on last year's models that are still on the dealers' lots? Use supply and demand concepts to do your analysis.

Equilibrium is the

A seller at a farmer's market wants $10 for a bag of 10 apples. You think his price is too high, so you counter with an offer of $6 for the bag. The seller then offers you a much smaller bag of five apples for $6. You bargain again, and the seller lets you buy the 10 apples for $8. This scenario is an example of:

If steak is a normal good, when incomes rise, the equilibrium price will _____, and the equilibrium quantity will _____.

(Figure: Shifts in Demand and Supply III) Use Figure: Shifts in Demand and Supply III. The figure shows how supply and demand might shift in response to specific events. Suppose a wet and sunny year increases the nation's strawberry crop by 20%. Which panel BEST illustrates how this event will affect the market for strawberries?