Use the following to answer questions 1-3:
1. Refer to the above diagram. If demand changes from D1 to D2 at the same time supply changes from S2 to S1, equilibrium price will:
A) rise and equilibrium quantity will fall. C) rise, as will equilibrium quantity.
B) fall and equilibrium quantity will rise. D) fall, as will equilibrium quantity.
2. Refer to the above diagram. If demand changes from D2 to D1 at the same time supply changes from S1 to S2, equilibrium price will:
A) rise and equilibrium quantity will fall. C) rise, as will equilibrium quantity.
B) fall and equilibrium quantity will rise. D) fall, as will equilibrium quantity.
3. Refer to the above diagram. Which of the following will increase equilibrium price and reduce equilibrium quantity?
A) a shift of supply from S1 to S2, with demand remaining at D1.
B) a shift of supply from S2 to S1, with demand remaining at D2.
C) simultaneous shifts of demand from D1 to D2 and supply from S1 to S2.
D) simultaneous shifts of demand from D2 to D1 and supply from S2 to S1.
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