Use utility per dollar and budget constraints to explain utility-maximizing consumption choices, then connect demand and supply shifts to market equilibrium.
The table above shows the quantity demanded and quantity supplied for bushels of wheat at various prices. Which of the following combinations is the equilibrium price and quantity for wheat?
Price
Bushels of Wheat
$2.00
10,000
$1.75
15,000
$1.50
20,000
$1.25
30,000
$0.75
5,000
ANNUAL CONSUMER PRICE INDEX (CPI)
． Shirts are bought and sold in a competitive market．If there are 1,200 shirts available for sale but consumers would like to purchase 1，500 shirts at the current market price，which of the following is true？
（A） The current market price is higher than the equilibrium market price．
（B） The market is experiencing a shortage．
（C） The market is experiencing a surplus．
（D） The market is in equilibrium．
（E） The quantity supplied is greater than the quantity demanded．
Assume that the market for bottled water is in equilibrium. If both the supply of and the demand for bottled water decrease, what will be the effect on equilibrium price and quantity?
Price
Quantity
Decrease
Decrease
Decrease
Increase
Increase
Decrease
Increase
Indeterminate
Indeterminate
Decrease