1. The change in the market is represented by an increase/decrease/no change in
ID: 1142691 • Letter: 1
Question
1. The change in the market is represented by an increase/decrease/no change in the demand and an increase/decrease/no change in supply (circle one for each)
2. The change in the market will result in a
a)surplus
b)shortage
c)Unknown
3. In the market, the price the consumer pays will
a) rise
b)fall
c)unknown
4. Because of the price change, the quantity demanded will
a) rise
b)fall
c)unknown
5. Because of the price change, the quantity supplied will
a) rise
b)fall
c)unknown
What is the equilibrium Market Price and Market Quantity when it settles at equilibrium
Explanation / Answer
You are just beginning your study of economics, but let us fast-forward to the end of your first
economics course. How will your study of economics affect the way you see the world?
The final exam is over. You are sitting at a restaurant table, waiting for your friends to arrive.
The place is busy and loud as usual. Looking around, you see small groups of people sitting
and talking animatedly. Most of the customers are young; this is not somewhere your parents
visit very often. At the counter, people line up to buy food. You watch a woman choose some
items from the menu and hand some notes and coins to the young man behind the counter.
He is about the same age as you, and you think that he is probably from China. After a few
moments, he hands her some items, and she takes them to a table next to yours.
Where are you? Based on this description, you could be almost anywhere in the world. This
particular fast-food restaurant is a Kentucky Fried Chicken, or KFC, but it could easily have
been a McDonald’s, a Burger King, or any number of other fast-food chains. Restaurants like
this can be found in Auckland, Buenos Aires, Cairo, Denver, Edinburgh, Frankfurt,
Guangzhou, and nearly every other city in the world. Here, however, the menu is written in
French, and the customer paid in euros (€). Welcome to Paris.
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