1 0/1 point STEP 1: How will the demand curve or the supply curve shift? Demand increases (demand curve shifts right) Demand decreases (demand curve shifts left). Supply increases (supply curve shifts right). Supply decreases (supply curve shifts left). (response not displayed) 2 1/1 point 3 STEP 2: Which rule explains the reason for the curve shift you selected in step #1? Change in income. Change in the price of a related good. Change in consumer expectations. Change in consumer tastes or preferences. Change in transactions costs (demand side). Change in population. Change in the price of an input required for production. Change in technology. Change in government regulation or taxation. Change in transaction costs (supply side). Change in the number of producers/firms. (response not displayed) 0/1 point STEP 3: Based on demand or supply curve shift you selected, what type of market imbalance will result? Shortage 3 0/1 point STEP 3: Based on demand or supply curve shift you selected, what type of market imbalance will result? Shortage Surplus (response not displayed) 4 0/1 point STEP 4: Based on the type of market imbalance you selected, who initiates the action necessary to resolve the market imbalance? (response not displayed) (response not displayed) with marginal (response not displayed) than the original equilibrium price begin to drive prices (response not displayed) 5 0/2.5 points STEP 5: On the demand side, what process of change takes place during the market's equilibrating process? (response not displayed) The quantity demanded as the price is driven Po (response not displayed) because consumers with marginal valuations Po (response not displayed) (response not displayed) than the changing price the market. 6 0/2.5 points STEP 6: On the supply side, what process of change takes place during the market's equilibrating process? 5 0/2.5 points STEP 5: On the demand side, what process of change takes place during the market's equilibrating process? (response not displayed) The quantity demanded as the price is driven (response not displayed) (response not displayed) because consumers with marginal valuations (response not displayed) than the changing price the market. 6 0/2.5 points STEP 6: On the supply side, what process of change takes place during the market's equilibrating process? (response not displayed) The quantity supplied as the price is driven (response not displayed) because suppliers with marginal (opportunity) costs Fo (response not displayed) (response not displayed) than the changing price the market. 7 0/1 point STEP 7: After the market finds a new equilibrium, the market price will be Fo (response not displayed) and the market quantity will be (response not displayed)