4-2
1. A decrease in quantity demanded
a. r esults in a movement downward and to the right along a demand curve.
b. r esults in a movement upward and to the left along a demand curve.
c. s hifts the demand curve to the left.
d. s hifts the demand curve to the right.
2. A decrease in the price of a good will
a. i ncrease demand.
b. d ecrease demand.
c. i ncrease quantity demande
d.
d. d ecrease quantity demanded.
3. A rightward shift of a demand curve is called a(n)
a. i ncrease in demand.
b. d ecrease in demand.
c. d ecrease in quantity demande
d.
d. i ncrease in quantity demanded.
4. The market supply curve
a. is found by vertically adding the individual supply curves.
b. slopes downward.
c. r epresents the sum of the prices that all the sellers are willing to accept for a given
quantity of the good.
d. represents the sum of the quantities supplied by all the sellers at each price of the good.
5. When the market price is below the equilibrium price, suppliers are unable to sell all
they want to sell.
a. T rue
b. F alse
Table 4-1
The following table shows the number of cases of water each seller is willing to sell at
6. Refer to Table 4-1. If all four suppliers operate in this market, what is the market quantity supplied when the price is $6.00 per case?
7.Refer to Table 4-1.If only Brook Mountain and Cascade Waters operate in this market, what is the market quantity supplied when the price is $3.00 per case?
Case 4-2
Suppose the demand schedule in a market can be represented by the equation
, where is the quantity demanded and is the price. Also, suppose the supply schedule can be represented by the equation , where is the quantity supplied.
8. Refer to Case 4-2. What is the equilibrium price and equilibrium quantity in this market?
9. Refer to Case 4-2. Suppose the price is currently equal to 10 in this market. Is there
a shortage or surplus in this market, and how large is the shortage/surplus?
10. Refer to Case 4-2. Suppose the price is currently equal to 18 in this market. Is there
a shortage or surplus in this market, and how large is the shortage/surplus?
11. Refer to Case 4-2. Suppose the supply curve shifts to . What is the new equilibrium price and quantity in this market?
12. Suppose we are analyzing the market for hot chocolate. Graphically illustrate the impact each of the following would have on demand or supply. Also show how equilibrium price and equilibrium quantity would change.
a. The Surgeon General of the U.S. announces that hot chocolate cures cancer.
b. Protesting farmers dump millions of gallons of milk, causing the price of milk to
rise.
c. Consumer income falls because of a recession, and hot chocolate is considered a
normal good.
d. A better method of harvesting cocoa beans is introduced.
Answers to 4-2
1.b
2.c
3.a
4.d
5.b
6. 600 cases
7. 100 cases
8. Q
=Q S,500-10P=200+10P,P e=15,Q e=350
D
9.P=10, Q D= 400,Q S=300. There is a shortage of 100 units.
10.P=18, Q D= 320,Q S=380. There is a surplus of 60 units.
11. Q
=Q S,500-10P=300+10P,P e=10,Q e=400
D
12.a)
b)
c)
d)。