Suppose there is currently a surplus of wheat on the world market. The problem of excess supply may be removed from the market by: (a) lowering the market price. (b) shifting the supply curve leftward. (c) shifting the demand curve leftward. (d) Both A and B are plausible actions.
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30. Suppose there is currently a surplus of wheat on the world market. The problem of
excess supply may be removed from the market by:
(a) lowering the market price.
(b) shifting the supply curve leftward.
(c) shifting the demand curve leftward.
(d) Both A and B are plausible actions.
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Solved in 2 steps
- 1.An increase in the cost of flour used to bake bread is most likely to (a) decrease the demand for bread. (b) increase the supply of bread. (c) decrease the supply of bread. (d) increase the demand for bread. 2. Which of the following will result in a decrease in the equilibrium quantity of a good? (a) An increase in both demand and supply. (b) A decrease in both demand and supply (c) An increase in demand together with a decrease in supply. 4. (d) A decrease in demand together with an increase in supplyWhich of the following statements is/are TRUE? (a) At market equilibrium, quantity demanded, and quantity supplied are equal. (b) At market equilibriums Supply and Demand are equal. (c) A market surplus exists when quantity supplied exceeds quantity demanded. (d) A market shortage exists when quantity demanded exceeds quantity supplied. (e) When a market shortage exists, the buyers will bid up the price of the good which will cause the quantity demanded to decrease and quantity supplied to increase until equilibrium is restored. (f) In the case of a market surplus, the suppliers will bid down the price causing the quantity demanded to increase and quantity supplied to increase until equilibrium is restored. (g) A market shortage causes Supply to increase and Demand to decrease until equilibrium is restored. (h) A market surplus causes the Demand to increase and Supply to decrease until equilibrium is…4. Currently the equilibrium price and quantity in the milk market are $4 per gallon and 100,000 gallons. The Price Elasticity of Demand is determined to be 0.80 while the Price Elasticity of Supply is determined to be 1.20. A price floor is set at 20% above the current equilibrium price. (a) Determine the dollar amount of the price floor. (b) Determine the Qs after the price is imposed. (c) Determine the Qd after the price is imposed.
- Assume gasoline is sold in a competitive market, the equilibrium price is $50 per barrel, and the equilibrium quantity is 1000 barrels. (a) Using the numerical values above, draw a correctly labeled graph of the gasoline market and show each of the following. (i) The equilibrium price (ii) The equilibrium quantity (b) At a price of $40 per barrel, will there be a surplus or a shortage in the market? Explain. (c) Assume new oil wells are discovered. On your graph from part (a), show how this change will affect the equilibrium price and quantity in the market for gasoline. (d) Assume instead there is an increase in the price of gasoline-operated automobiles. How will this change affect the market for gasoline? Explain. (e) If both changes in part (c) and part (d) occurred simultaneously, what will happen to the equilibrium price and quantity of gasoline?(d) What will happen in the market for tomatoes if a new study is released that shows tomatoes contain antioxidants (may help prevent cancer)? (e) What will happen in the market for corn if a new crop rotation technique is discovered that allows the corn to be grown more easily and the price of green beans, a substitute, decreases? (f) What will happen in the market for gasoline if the price of oil increases and there is a vast increase in the population (e.g., another baby boomer generation)?Which of the following would you expect to displace the demand for beef?Response option group (a) An increase in the price of beef. (b) A reduction in the price of beef. (c) An outbreak of mad cow disease. (d) None of the above.
- (a) State on thing that would cause market supply to increase (cause the supply curve to shift to the right). (b) If supply were to increase, would equilibrium price increase or decrease? (c) If supply were to increase, would equilibrium quantity increase or decrease?Assume gadgets are sold in a competitive market, the equilibrium price is $6, and the equilibrium quantity is 500 units.(a) Using the numerical values above, draw a correctly labeled graph of the market for gadgets and show each of the following.(i) The equilibrium price(ii) The equilibrium quantity(b) At a price of $8 per unit, will there be a surplus or a shortage in the market? Explain.(c) Assume gadgets now become more popular. On your graph in part (a), show the effect of the increase in gadgets' popularity on the equilibrium price and quantity of gadgets.(d) Assume instead there is an increase in the price of tin, a major input in producing gadgets. What will be the effect of an increase in the price of tin on the market for gadgets?(e) If both changes in part (c) and part (d) occurred simultaneously, will the equilibrium quantity of gadgets increase, decrease, remain unchanged, or be indeterminate? Explain.Resource X is necessary in the production of good Y. If the price of resource X decreases A the supply curve of Y shifts leftward. В the supply curve of Y shifts rightward. (c) the supply curve of Y is unaffected. C there is a movement down along the D supply curve of Y. there is a movement up along the supply E curve of Y.
- The following table shows the demand and supply of tickets of a football game which will be held at Shah Alam Stadium. Unit Price (RM) Market Demand (units) Market Supply (units) 20 5000 3500 40 4000 3500 60 3000 3500 80 2000 3500 100 1000 3500 a) On your foolscap paper, draw the demand and supply curves. Label all axes, all curves and the equilibrium point. (6m) b) How much is the equilibrium price and equilibrium quantity? (2m) c) At which price will there be a surplus of 2500 tickets? (1m) d) What will happen when the market price is RM40? Show your answer on the same diagram. (3m) e) Why is the supply of tickets fixed at 3500? (1m)Which of the following statements is (are) correct?(x) If the supply curve is upward sloping and a shortage exists in a market then the quantity sold will increase as the price moves to the equilibrium price. (y) If the supply curve is upward sloping, the demand curve is downward sloping and a surplus exists in a market then the quantity sold will increase as the price moves to the equilibrium price. (z) Although suppliers are willing to sell more than buyers are willing to purchase at a price above equilibrium, more will be sold only if the price decreases.A. (x), (y) and (z) B. (x) and (y) only C. (x) and (z) only D. (y) and (z) onlyE. (x) only13. A possible explanation for a change in demand from D1 to D2 is (a) decrease in supply. (b) increase in supply. (c) improvement in technology. (d) increase in wages. (e) increase in the number of buyers. 14. A possible explanation for a change in supply from S1 to S2 is (a) an increase in consumer income. (b) a decrease in demand. (c) an increase in demand. (d) an increase in the cost of energy. (e) an increase in the number of sellers.