Economics 201
Extra Practice Problems
Changes in Equilibrium
1. Suppose that consumers find out that an apple a day actually does keep the doctor away. What will
most likely happen to the equilibrium price and quantity of apples?
A) Price rises, quantity rises.
B) Price falls, quantity rises.
C) Price rises, quantity falls.
D) Price falls, quantity falls.
2. Suppose that the price of tea, a substitute for coffee, falls. What will most likely happen to the
equilibrium price and quantity of coffee?
A) Price rises, quantity rises.
B) Price falls, quantity rises.
C) Price rises, quantity falls.
D) Price falls, quantity falls.
3. Suppose that a plague kills 10% of the people in France. If no bakers are killed, what will most
likely happen to the equilibrium price and quantity of croissants?
A) Price rises, quantity rises.
B) Price falls, quantity rises.
C) Price rises, quantity falls.
D) Price falls, quantity falls.
4. Suppose that consumers expect the price of DVD players to fall six months from now. What will
most likely happen to the equilibrium price and quantity of DVD players today?
A) Price rises, quantity rises.
B) Price falls, quantity rises.
C) Price rises, quantity falls.
D) Price falls, quantity falls.
5. Suppose that Spam is an inferior good. If there is a recession and incomes decline, what will most
likely happen to the equilibrium price and quantity of Spam?
A) Price rises, quantity rises.
B) Price falls, quantity rises.
C) Price rises, quantity falls.
D) Price falls, quantity falls.
