ECON101 DSM 3 QUESTIONS AND ANSWERS GRADED A+
Given linear demand curves, if demand and supply increase by identical amounts, then: - Answers the
equilibrium price stays the same and the equilibrium quantity rises
If the demand curve remains the same, and the supply curve shifts left, then: When supply decreases, a
______ develops at the original price. Equilibrium price will ___________ and equilibrium quantity will
_____________ as a new equilibrium is established. - Answers Shortage; rise; fall
Assume the cost of aluminum used by soft-drink companies increases. Which of the following correctly
describes the resulting effects in the market for canned soft drinks? - Answers The quantity of soft drinks
demanded decreases and the supply of soft drinks decreases
Given linear demand curves, if demand and supply both increase but demand increases by a greater
amount than supply, then: - Answers the equilibrium price and quantity both increase
Example of an inferior good: - Answers When consumer income increases, the demand for bologna
decreases
Washington state has a bumper apple crop this year, significantly increasing the supply of apples in the
US. Given this information, describe the effect this has on the US apple market: - Answers the quantity
of apples demanded will increase as the price of apples falls
Market price is determined by: - Answers both supply and demand
At the market equilibrium price: - Answers quantity demanded equals quantity supplied
Other things remaining equal, the law of demand say that higher prices will lead to: - Answers a smaller
quantity demanded and lower prices to a larger quantity demanded
Example of what will cause an outward shift in supply: - Answers a technological improvement
Economists assume that when there is a change in demand and/or supply, that prices reach a new
equilibrium: - Answers after an adjustment period that varies
In a price system: - Answers relative prices change constantly to reflect changes in supply and demand
Given linear demand curves, if demand increases and supply decreases, then: - Answers the equilibrium
price will increase, but the effect on the equilibrium quantity will be ambiguous
Given linear demand curves, if demand and supply increase by identical amounts, then: - Answers the
equilibrium price stays the same and the equilibrium quantity rises
If the demand curve remains the same, and the supply curve shifts left, then: When supply decreases, a
______ develops at the original price. Equilibrium price will ___________ and equilibrium quantity will
_____________ as a new equilibrium is established. - Answers Shortage; rise; fall
Assume the cost of aluminum used by soft-drink companies increases. Which of the following correctly
describes the resulting effects in the market for canned soft drinks? - Answers The quantity of soft drinks
demanded decreases and the supply of soft drinks decreases
Given linear demand curves, if demand and supply both increase but demand increases by a greater
amount than supply, then: - Answers the equilibrium price and quantity both increase
Example of an inferior good: - Answers When consumer income increases, the demand for bologna
decreases
Washington state has a bumper apple crop this year, significantly increasing the supply of apples in the
US. Given this information, describe the effect this has on the US apple market: - Answers the quantity
of apples demanded will increase as the price of apples falls
Market price is determined by: - Answers both supply and demand
At the market equilibrium price: - Answers quantity demanded equals quantity supplied
Other things remaining equal, the law of demand say that higher prices will lead to: - Answers a smaller
quantity demanded and lower prices to a larger quantity demanded
Example of what will cause an outward shift in supply: - Answers a technological improvement
Economists assume that when there is a change in demand and/or supply, that prices reach a new
equilibrium: - Answers after an adjustment period that varies
In a price system: - Answers relative prices change constantly to reflect changes in supply and demand
Given linear demand curves, if demand increases and supply decreases, then: - Answers the equilibrium
price will increase, but the effect on the equilibrium quantity will be ambiguous
