(Demand ,supply &Market Equilibrium)

Exercises
1) Assuming plasma TVs are a normal good, an increase in consumer incomes will lead to
A) a rightward shift of the demand curve for plasma TVs.
B) a movement upward along the demand curve for plasma TVs.
C) a rightward shift of the supply curve for plasma TVs.
D) no change of the demand curve for plasma TVs.
Answer:

2) As the price of a good increases, the change in the quantity demanded can be shown by
A) shifting the demand curve leftward.
B) shifting the demand curve rightward.
C) moving down along the same demand curve.
D) moving up along the same demand curve.
Answer:
3) If the price of Cars were to increase substantially, the demand curve for gasoline would
most likely
A) shift leftward.
B) shift rightward.
C) remain unchanged.
D) become steeper.
Answer:

4) If the price of Cars were to decrease substantially, the demand curve for public
transportation would most likely
A) shift right.
B) shift left.
C) remain unchanged.
D) remain unchanged while quantity demanded would change.
Answer:

5) An increase in the demand curve for orange juice due to consumer preferences is shaped
would be a:
A) leftward shift of the demand curve.
B) rightward shift of the demand curve.
C) movement up along the demand curve.
D) movement down along the demand curve.
Answer:

6) Which of the following would NOT change demand?

A) the price of the product
B) information about the product's health effects
C) the income of the consumers
D) the price of related products
Answer:

7) The quantity of a good that consumers demand depends only on the price of the good( )
Answer:

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8) Technological innovation in the production of computers has led to
A) a decrease in the quantity demanded for computers.
B) a rightward shift of the supply curve for computers.
C) a decrease in the quantity supplied of computers.
D) None of the above.
Answer:

9) The supply curve is influenced by:

A) the income of consumers.
B) the number of customers in the market.
C) the prices of the inputs required to produce the product.
D) Consumer preferences.
Answer:

10) Equilibrium is defined as a situation in which neither buyers nor sellers want to change
their behavior( )
Answer:

11) The above figure shows a graph of the market for pizzas in a large town. At a price of $5,
there will be:
A) excess demand.
B) excess supply.
C) equilibrium.
D) zero demand.
Answer:

12) The above figure shows a graph of the market for pizzas in a large town. What are the
equilibrium price and quantity?
A) p = 8, Q = 60
B) p = 7, Q = 40
C) p = 7, Q = 70
D) p = 10, Q = 40
Answer:

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13) The above figure shows four different markets with changes in either the supply curve or
the demand curve. Which graph best show the market for coffee after severe weather destroys
a large portion of the coffee crop?
A) Graph A
B) Graph B
C) Graph C
D) Graph D
Answer:

14) The above figure shows four different markets with changes in either the supply curve or
the demand curve. Assuming coffee and tea are substitutes, which graph best illustrates the
market for tea after severe weather destroys a large portion of the coffee crop?
A) Graph A
B) Graph B
C) Graph C
D) Graph D
Answer:

15) The above figure shows four different markets with changes in either the supply curve or
the demand curve. Which graph best illustrates the market for computers after technological
advances in making computers occur?
A) Graph A
B) Graph B
C) Graph C
D) Graph D
Answer:

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16) Suppose a market were currently at equilibrium. A rightward shift of the demand curve
would cause:
A) an increase in price but a decrease in quantity.
B) a decrease in price but an increase in quantity.
C) an increase in both price and quantity.
D) a decrease in both price and quantity.
Answer:

17) Suppose a market were currently at equilibrium. A rightward shift of the supply curve
would cause a(n)
A) increase in price but a decrease in quantity.
B) decrease in price but an increase in quantity.
C) increase in both price and quantity.
D) decrease in both price and quantity.
Answer:

18) If pizza and tacos are substitutes, a decrease in the price of tacos would lead to a
A) decrease in the demand curve for pizza.
B) decrease in the quantity demanded of taco.
C) increase in the price of pizza.
D) All of the above.
Answer:

19) The law of demand states that the quantity demanded of a good change, other things
being equal, when
A. the price of the good changes.
B. consumer income changes.
C. the prices of other goods change.
D. a change occurs in the quantities of other goods purchased.
Answer:

20) Which of the following is the result of a decrease in the price tea, other things being
equal?
A. A leftward shift in the demand curve for tea.
B. A downward movement along the demand curve for tea.
C. A rightward shift in the demand curve for tea.
D. An upward movement along the demand curve for tea.
Answer:

21) Which of the following will cause a movement along the demand curve for X?
A. A change in the price of a close substitute.
B. A change in the price of good X.
C. A change in consumer tastes and preferences for good X.
D. A change in consumer income.

Answer:

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 22) Assuming steak and potatoes are complements, a decrease in the price of steak will
A. decrease the demand for steak.
B. increase the demand for steak.
C. increase the demand for potatoes.
D. decrease the demand for potatoes.
Answer:
23) Assuming that steak is a normal good, a decrease in consumer income, other things being
equal, will:
A. cause a downward movement along the demand curve for steak.
B. shift the demand curve for steak to the left.
C. cause an upward movement along the demand curve for steak.
D. shift the demand curve for steak to the right.
Answer:
24) An increase in consumer income, other things being equal, will
A. shift the supply curve for a normal good to the right.
B. cause an upward movement along the demand curve for an inferior good.
C. shift the demand curve for an inferior good to the left.
D. cause a downward movement along the supply curve for a normal good.
Answer:
25) Suppose auto workers receive a substantial wage increase. Other things being equal, the
price of autos will rise because of a (an)
A. increase in the demand curve for autos.
B. rightward shift of the supply curve for autos.
C. leftward shift of the supply curve for autos.
D. decrease in the demand curve for autos.
Answer: *Note: car workers= auto workers

26) Assuming that soybeans and wheat can both be grown on the same land, an increase in
the price of wheat, other things being equal, causes a (an)
A. upward movement along the supply curve for soybeans.
B. downward movement along the supply curve for soybeans.
C. rightward shift in the supply for soybeans.
D. leftward shift in the supply for soybeans.
Answer:

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Answer Key :
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

A D A B B A False B C True A A C A B C B A A B B C B C C D

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 v Suppose the market for Apple can be expressed as follows:
Qd=70-2p
Qs=-15+3p
1-Solve for the equilibrium price and quantity?

P* Q*

2- at a price of SR20, the market for Apple will experience a :

A. Excess demand of 30 units.
B. Excess supply of 45 units.
C. Excess demand of 15 units.
D. Excess supply of 15 units.
Answer:
3- at a price of SR15, the market for Apple will experience a :
A. Excess demand of 40 units.
B. Excess supply of 30 units.
C. Excess demand of 10 units.
D. Excess supply of 10 units
Answer:
4- Use the graphic to show the equilibrium of the apple market?

5- Calculate the Consumer Surplus?

6- Calculate the Producer Surplus?