46

When there is "excess demand" for a product in a market, the:

Group of answer choices

price will tend to rise.

price must be above the equilibrium price.

producers will expand output at the current price.

price will tend to fall.

47

Figure 3-11

In Figure 3-11, supposeD1 andS1 indicate initial conditions in the market for kitchen cabinets. Which of the following would tend to cause the supply curve to shift fromS1 toS2?

Group of answer choices

An increase in consumer income

A decrease in the number of consumers

An increase in the price of wood, a resource used to produce kitchen cabinets

A decrease in the price of steel hinges, a resource used to produce kitchen cabinets

48

After a hurricane in Florida knocked out the regional water supply for several days, the demand for bottled water increased sharply. In a market economy, how will this increase in demand affect the equilibrium price and quantity of bottled water?

Group of answer choices

Price will increase, and quantity will decrease.

Price will decrease, and quantity will decrease.

Price will decrease, and quantity will increase.

Price will increase, and quantity will increase.