If demand increases and supply decreases,
a. equilibrium price will fall and equilibrium quantity will rise
b. equilibrium price and quantity will both rise
c. equilibrium quantity will rise; equilibrium price will either rise or fall
d. equilibrium price will fall; equilibrium quantity will either rise or fall
e. equilibrium price will rise; equilibrium quantity will either rise, fall, or remain unchanged
QUESTION 2If both supply and demand increase, then the change in equilibrium quantity is indeterminate.
a. True
b. False
QUESTION 3If supply increases and demand decreases, then equilibrium price will fall.
a. True
b. False
QUESTION 4If the market for beef cattle was initially in equilibrium, an increase in the price of the feed grains used to fatten cattle would cause
a. the demand for beef cattle to increase, driving the price of beef upward
b. the supply of beef cattle to decline, driving the price of beef upward in the long run
c. the supply of beef to increase, placing downward pressure on the price of beef in the long run
d. both supply and demand to fall, leaving the price of beef virtually unchanged
e. the supply of beef to increase, driving the price of beef down and increasing demand
QUESTION 5If supply decreases along a given demand curve,
a. an excess quantity demanded will be created, increasing the equilibrium price and causing equilibrium quantity to fall
b. an excess quantity supplied will be created, lowering the equilibrium price and causing equilibrium quantity to rise
c. an excess quantity demanded will be created, raising the equilibrium price and quantity
d. an excess quantity supplied will be created, lowering the equilibrium price and quantity
e. price will fall, shifting the demand curve outward, raising the equilibrium quantity
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