The Market of Microeconomics, Unit 2

In a market economy, prices are determined using a cost/benefit analysis.

• True
• False

A change in quantity is caused by a change in price.

• True
• False

In a market economy, equilibrium stays constant and never moves.

• True
• False

Supply represents consumers' willingness and ability to purchase goods and services.

• True
• False

Which of the following is true of equilibrium?

• Equilibrium is when all prices of supply are the same as all prices of demand
• Equilibrium is when quantity supplied is equal to quantity demanded
• Equilibrium is when consumers are able to buy as much as possible at the lowest price while producers are able to sell as much as possible at the highest price
• Equilibrium is impossible to achieve in a market economy

What is the equilibrium price and equilibrium quantity of the graph pictured here?

• Ep=9; Eq=300
• Ep=50; Eq=400
• Ep=90; Eq=800
• Ep=10; Eq=0

Select the correct graph that displays the following change to the market for SHELTER DOGS. "The price of Kibbles and Pedigree puppy chow have risen"

• Graph 1
• Graph 2
• Graph 3
• Graph 4

Select the correct graph that displays the following change to the market for SHELTER DOGS. "A new study finds that individuals who own at least one dog live happier, healthier lives than those without."

• Panel A
• Panel B
• Panel C
• Panel D

Select the correct graph that displays the following change to the market for SHELTER DOGS. "The shelter is having a special on all cats and kittens. Their adoption will be free for the entire week of Thanksgiving!"

• Panel A
• Panel B
• Panel C
• Panel D

Select the correct change to equilibrium that best fits the following change to the market for SHELTER DOGS. "Greenville City announces the opening of a third animal shelter, this one on Main Street in Downtown."

• Equilibrium price increases; Equilibrium quantity increases
• Equilibrium price decreases; Equilibrium quantity decreases
• Equilibrium price increases; Equilibrium quantity decreases
• Equilibrium price decreases; Equilibrium quantity increases