Each row and column heading describes a shock to a market initially in equilibrium.  Fill in the table indicating whether the new equilibrium price and quantity will increase, decrease, or not change. 

A recent study found that the demand and supply schedules for flying disks are as follows:

Complete the first row of the following table by indicating the equilibrium price and the equilibrium quantity of flying disks in the absence of any price controls.

Flying disk manufacturers persuade the government that flying disk production improves scientists' understanding of aerodynamics and thus is important for national security. A concerned Congress votes to impose a price floor $2 above the equilibrium price.

Complete the second row of the previous table by indicating the new price and quantity of flying disks when Congress imposes a price floor $2 above the equilibrium price. Then indicate whether the price floor is binding or not binding.

Irate college students march on Washington and demand a reduction in the price of flying disks. An even more concerned Congress votes to repeal the price floor and impose a price ceiling $3 below the former price floor.

Complete the final row of the previous table by indicating the new price and quantity of flying disks when Congress imposes a price ceiling $3 below the former price floor. Then indicate whether the price ceiling is binding or not binding.

A. In the market for a good, there is an increase in demand and a decrease in supply. You would expect the equilibrium price to _____ and the equilibrium quantity sold to ____.

no change: increase

increase: uncertain increase :

no change uncertain: increase

B. In the market for beef, a severe drought increases the price of corn (animal food). You would expect the equilibrium price of beef to _____ and the equilibrium quantity sold to ____.

increase: decrease

decrease: decrease

increase: increase

decrease: increase

C. In the market for pizza, five new restaurants open. You would expect the equilibrium price to _____ and the equilibrium quantity sold to ____.

increase: increase

increase: decrease

decrease: increase

decrease: decrease

D. In the pizza market, the price of hamburgers (a substitute for pizza) has gone up. You would expect the equilibrium price of a pizza to _____ and the equilibrium quantity of pizza sold to ____.

increase: increase

decrease: increase

decrease: decrease

increase: decrease

A decrease in input costs to firms in a market will result in a(n):

a) decrease in equilibrium price and an increase in equilibrium quantity.

b) decrease in equilibrium price and a decrease in equilibrium quantity.

C) increase in equilibrium price and a decrease in equilibrium quantity.

d) increase in equilibrium price and an increase in equilibrium quantity.