Question

35. Holding demand constant, a decrease in supply will typically ___________

a. decrease equilibrium price but leave equilibrium quantity unchanged

b. decrease equilibrium price and increase in equilibrium quantity

c. increase both equilibrium price & quantity

d. increase equilibrium price and decrease equilibrium quantity

e. decrease both equilibrium price & quantity

36. Holding supply constant, a decrease in demand will result in a(n) ___________

a. increase in equilibrium price & a decrease in equilibrium quantity

b. increase in supply

c, increase in equilibrium price & quantity

d. decrease equilibrium price & an increase in equilibrium quantity

e. decrease in equilibrium price & quantity

37. When a market is in equilibrium, (hint: what does it mean to be in “equilibrium”)

a. producers earn profits

b. there is no incentive for buyers or sellers to change their behavior

c. the minimum possible price is achieved

d. costs have been minimized

e. there is a surplus of the good

40. Assuming that the price elasticity of demand for slinkys (slinkys are a metal spring-like children's toy) is 2, an increase in the price of slinkys of 15% would result in (for slinkys) ___________

a. an increase in the quantity supplied of 30%

b. A decrease in demand of 30%

c. a decrease in the quantity demanded of 7.5%

d. a decrease in the quantity demanded of 30%

Answer 1

Ans) the correct option is d) increase equilibrium price and decrease equilibrium quantity

Ans) the correct option is e. decrease in equilibrium price & quantity

Ans) the correct option is b. there is no incentive for buyers or sellers to change their behavior

Ans) the correct option is d. a decrease in the quantity demanded of 30%

decrease in the quantity demanded = 2*15 = 30%