-(Exhibit: Markets and Efficiency) in Panel (B) Demand Shifted from D₁

question 16

Multiple Choice

-(Exhibit: Markets and Efficiency) In Panel (b) demand shifted from D₁ to D₂ reflecting a change in consumer preferences. Based upon that, which of the following statements is true?

• A) At the price of $.80, the quantity of apples demanded will now be greater than the quantity supplied.
• B) At the price of $.80, the quantity supplied of apples will now equal the quantity demanded.
• C) There is pressure for the price of apples to fall to $0.70 per pound.
• D) A shortage of apples will force the price up to the new price of $0.90.

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Definitions:

Market Wage

The prevailing rate of pay for workers in a particular labor market, job, or industry.

Perfect Competitor

A theoretical market situation in which no individual buyer or seller has the power to influence market prices.

Demand Curve

An illustrated chart that depicts how the demand for a product varies with changes in its price.

Marginal Product

The addition to total output due to the use of one more unit of a variable input, keeping all other inputs constant.