Unit 2: Supply and Demand

In a standard supply and demand diagram where the demand curve (D) and supply curve (S) intersect at equilibrium point E, with the price axis showing point A (where D meets the price axis) and point B (where S meets the price axis), and point C on the price axis at the equilibrium price, consumer surplus is represented by the area

What are the effects on the supply and demand curves for Frisbees if a new manufacturing procedure reduces the cost of making Frisbees?

In the same period there is a drought affecting the supply of pineapples and a discovery that pineapples help prevent cancer. How will this combination of events affect the equilibrium price and quantity of pineapples?

Which of the following will shift the supply curve for textbooks to the left?

Which of the following is most likely to have the most elastic demand?

Which of the following statements about a price ceiling is accurate?

Which of the following combinations of supply and demand shifts most likely explains the observed changes?

Which of the following indicates that two goods are complements?

If a decrease in income of 10 percent causes a consumer's consumption of vitamins to increase by 15 percent, which of the following statements is most likely correct?

Which of the following is most likely to result in a shift to the right in the demand curve for orange juice?

If the price of a good is above the equilibrium price, which of the following will occur?

A decrease in the price of a complement will cause the demand curve for the related good to

Which of the following will cause the supply curve for a good to shift to the left?

If the government imposes a price ceiling of $3, what will be the result?

Consumer surplus is

If the price elasticity of demand for a good is 0.4, demand is said to be

An increase in consumer income will most likely cause an increase in demand for

If the cross-price elasticity of demand between two goods is negative, the goods are

When a per-unit tax is imposed on sellers, which of the following occurs?

When demand is perfectly inelastic, a tax imposed on sellers will be

Producer surplus is represented graphically by the area

If two goods are substitutes, an increase in the price of one good will cause

Deadweight loss from a tax is greatest when

If both demand increases and supply decreases simultaneously, the equilibrium price will

A binding price ceiling will lead to

What is the total revenue when the price is $6?

If total revenue decreases when price increases, demand is

An increase in the number of sellers in a market will cause

Income elasticity of demand for an inferior good is

Which of the following would most likely make the demand for a good more elastic?

A government subsidy to producers will

The price of gasoline rises from [math]3.60 per gallon, and the quantity demanded falls from 100 million gallons to 90 million gallons. Using the midpoint method, the price elasticity of demand is approximately

The government imposes a per-unit tax of [math]20 and quantity was 1,000. After the tax, the price rises to $23 and quantity falls to 900. What is the incidence of the tax on consumers and producers?

If the cross-price elasticity of demand between goods A and B is −2.5, which of the following is true?

The government imposes a price ceiling of [math]5 and equilibrium quantity is 200 units. At $3, quantity demanded is 300 and quantity supplied is 100. What is the resulting deadweight loss area?

In the market for gasoline, the government imposes a per-unit tax of $0.50 on producers. If the demand for gasoline is relatively inelastic and supply is relatively elastic, which of the following is most likely?

Coffee and tea are substitutes. If a frost destroys a large portion of the coffee bean crop, what is the most likely effect on the market for tea?