What will be the effect if the price is now $1200?

There would be a surplus of 30.

Which of the following factors will shift the demand curve left?

An increase in income if the product is an inferior good.

All of the these except one would increase demand for a normal product. Which is the exception?

Consumer expectations of a lower future price for a product.

What is the effect of an increase in the price of coffee?

It will increase the demand for tea.

What is the effect of a decrease in the supply of a product?

It will increase the price, but decrease quantity traded.

What is the effect of a decrease in the price of a product?

It will increase the quantity demanded.

If a market is initially in equilibrium & demand increases by 60, what is the new equilibrium.

A price of $1200 and quantity traded of 160.

Assume that there is a shortage of 60 units. What does this mean?

Buyers would be willing to pay $600 more for this quantity.

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Supply and demand

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Determinants of demand and supply

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Questions 10

Answers

1
What will be the effect if the price is now $1200?
There would be a surplus of 60.
160 would be purchased.
There would be a shortage of 30.
There would be a surplus of 30.
2
Which of the following factors will shift the demand curve left?
A decrease in the price of a complement.
The expectation that future prices will be higher.
An increase in the price of a substitute product.
An increase in income if the product is an inferior good.
3
All of the these except one would increase demand for a normal product. Which is the exception?
Consumer expectations of a lower future price for a product.
An increase in the size of the market.
An increase in the price of a substitute product.
An increase in consumers' incomes.
4
All of these except one would decrease the supply of Product A. Which is the exception?
Supplier expectations of a higher future price of Product A.
An increase in the price of resources used to make it.
An improvement in technology.
An increase in business taxes.
5
What is the effect of an increase in the price of coffee?
It will decrease the demand for tea.
It will decrease the demand for coffee.
It will increase the demand for tea.
It will have no effect on the tea market.
6
What is the effect of a decrease in the supply of a product?
It will decrease both price and quantity traded.
It will increase both price and quantity traded.
It will increase the price, but decrease quantity traded.
It will decrease the price, but increase quantity traded.
7
What will a surplus lead to?
An increase in supply.
An increase in price.
A reduction in supply.
A reduction in price.
8
What is the effect of a decrease in the price of a product?
It will increase the quantity demanded.
It will increase the demand.
It will decrease the quantity demanded.
it will decrease the demand.
9
If a market is initially in equilibrium & demand increases by 60, what is the new equilibrium.
A price of $1000 and quantity trade of 160.
A price of $1200 and quantity traded of 160.
A price of $1400 and quantity traded of 160.
A price of $1000 and quantity traded of 120.
10
Assume that there is a shortage of 60 units. What does this mean?
Buyers would be willing to pay $600 more for this quantity.
The price must be $600.
The price must be $1200.
The price must be above equilibrium.

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