A market shortage occurs when Multiple Choice the quantity demanded is less than the quantity supplied at a given price. the market price is below equilibrium. sellers produce a lot of the product and consumers like it a lot. a new product is introduced at the equilibrium price.

1. A local grocery store orders 200 cases of Pepsi each week and sells them at a price of $6.00 per case. At the end of the first week, they have only sold 160 cases. What economic situation is the grocery store facing and what will have to happen to price in order for equilibrium to be attained?

a. surplus; price will rise.

b. surplus; price will fall.

c. shortage; price will rise.

d. shortage; price will fall.

e. nothing since the market is in equilibrium.

2. Which of the following can lead to an increase in the supply for good X?

a. a decrease in the number of sellers of good X.

b. an increase in the price of inputs used to make good X.

c. an increase in consumers' income, assuming good X is a normal.

d. an improvement in technology used in production of good X.

e. none of the above

3. An increase in the price of electricity will:

a. increase the demand for kerosene heaters.

b. increase the demand for light bulbs.

c. increase the demand for stereos.

d. increase the demand for TVs.

4. Which of the following events will cause an increase in the market demand for Guinness (a brand of beer)?

a. A decrease in the price of Guinness.

b. An increase in the price of Heineken (another brand of beer).

c. An increase in the price of Planters peanuts (a complementary good).

d. An increase in income, if Guinness is an inferior good.

e. None of the above will cause an increase in demand.