A decrease in demand, accompanied by a simultaneous decrease in supply, will alw
ID: 1217813 • Letter: A
Question
A decrease in demand, accompanied by a simultaneous decrease in supply, will always cause the equilibrium price and quantity of the good to fall. The long run refers to the time interval in which suppliers are able to change the quantity of some, but not all, of the resources (inputs) used in the production of a good. For complementary goods, an increase in the price of one shifts the demand curve for the other to the right. When supply is variable or the product is standardized then the price is strictly determined by demand. Except for market-day supply, an increase in price will generate an increase in quantity supplied. When Saukville's personal computer assembly plant closed, 30% of the community's labor force was laid off. Following this event Joe's New Car Dealership (NCD, Inc.) complained because the new cars. a. quantity supplied of; fell b. supply of; increased c. quantity demanded of; fell d. demand for; fell e. demand for; was unchanged If Andrew is scalping tickets for the Stanley Cup, he will be successful at selling the tickets for a profit a. when the price set by the National Hockey League is less than the market equilibrium price. b. when prices are too high. c. any time the Stanley Cup is popular. d. only when there is excess supply. If the equilibrium price of gasoline is $3.00 per gallon and the government will not allow oil companies to charge more than $2.00 per gallon of gasoline, which of the following will most likely happen? a. The market will be in equilibrium at a price of $2.00. b. Supply must eventually increase so that the market will come into equilibrium at a price of $2.00. c. Demand must eventually decrease so that the market will come into equilibrium at a price of $2.00. d. A non price rationing system such as ration coupons must be used to allocate the available supply of gasoline. A demand curve a. has a positive slope; that is, when p ice increases, quantity demanded increases b. b.depicts the negative relationship between price and quantity demanded; that is when price increases, quantity demanded falls c. depicts what happens to demand when supply changes d. depicts what happens to supply when demand changes e. illustrates that price and quantity demanded cannot change at the same timeExplanation / Answer
1. False. Quanity will decrease price may or may not decrease.
2. False, in the long run producers are able to change all costs.
3. False, increase in price of one good, reduces the demand for the other good, shifting the demand curve to the left.
4. False. It is not always true.
5. true. an increase in price will increase quanitty supplied. This is law of supply.
6. Demand for cars fell becuase people could not afford cars due to lost jobs.