Microeconomics - Supply & Demand Worksheet

1. When market price equals $12, we have a situation called

a. consumer protection.
b. market equilibrium.
c. excess demand.
d. excess supply.

2. After the increase in demand, if price stays at $8, there is now

a. equilibrium.
b. excess quantity supplied.
c. excess quantity demanded.
d. a tendency for price to decrease.

3. Which of the graphs best describes the impact of a decrease costs/input prices that firms must pay in order
to produce output?
a. A
b. B
c. C
d. D
4. Which graph shows an increase in supply?

a. A
b. B
c. C
d. D

5. This graph shows that

a. when the size of a decrease in supply is greater than the size of an increase in demand, equilibrium
price will rise, and quantity will fall.
b. when the size of an increase in supply is greater than the size of an increase in demand, equilibrium
price will fall, and quantity will rise.
c. when supply and demand both increase, price always decreases.
d. in equilibrium, quantity demanded is not always equal to quantity supplied.

6. Markets have a tendency to arrive at equilibrium. Explain.

7. If supply and demand both increase, equilibrium price may increase or decrease. Explain.