1.

Economic models or theories

a. are limited to variables that are directly (positively) related
b. are simplifications of the real world they represent
c. cannot be tested empirically
d. are limited to variables that are inversely related
2. The most basic assumption upon which the foundation of economics is based is that
a. continued technological improvement is necessary to stimulate essential economic growth.
b. the market system is the best of all possible production systems.
c. private ownership of resources is necessary for maximum economic growth.
d. society's resources are limited and unable to satisfy unlimited wants.
3. The difference between a scarce (economic) good and a free good is that
a. for free goods at a price of zero enough of the good is available to completely satisfy consumers' demand for the good
b. free goods no longer exist -- there are only scarce goods
c. free goods are made with natural resources
d. free goods are provided by the government
4. To an economist, a good is scarce when:
a. the amount of the good available is less than the amount that people want when the good's price equals zero
b. the amount of the good available is greater than the amount that people want when the good's price equals zero
c. resources must be used to produce the good
d. the economic questions of what, how, and for whom to produce, cannot be answered by the economy involved
5. "More jobs should be made available to teenagers." This is an example of
a. a normative statement
b. a positive statement
c. an assumption
d. a hypothesis
6. "A compassionate welfare program should have a higher priority than strong defense." This statement is an example of
a. the ceteris paribus fallacy
b. a normative economic statement
c. a positive economic statement
d. the fallacy of composition
7. Normative economic statement is concerned with what should be and is often identified with policy prescriptions. Which of
the following is an example of normative economic statement?
a. The government should increase the tax for SMS (short message service)
b. to increase government revenues.
c. Taxing SMS will increase government revenues.
d. The importation of rice should be allowed during periods of shortage to avoid the price of rice to increase abruptly.
e. If the government will not import rice during periods of shortage, price of rice will increase
f. all of the above
8. The analysis of how an individual consumer or producer responds to changes in economic environment is
a. Macroeconomics
b. Microeconomics
c. Economic theory
d. Economic policy
9. The analyses of aggregate economic magnitudes like inflation, money supply, interest, balance of payment, among others.
a. Macroeconomics
b. Microeconomics
c. Economic Theory
d. Economic Policy
10. Economic decisions are guided by which of the following criteria?
a. Marginal Costs are greater than Marginal Benefits
b. Marginal Costs are lesser than Marginal Benefits
c. Neither a nor b
11. Which of the following statements is incorrect?
a. Microeconomics is primarily concerned with the economic activities of the household, business firms and the government
sector
b. Microeconomics is primarily concerned with the flow of goods and services from business firms to consumers, the
composition of the flow, and the evaluation or pricing of the component parts of the flow.
c. Microeconomics is primarily concerned with the problem of what, how and for whom to produce
d. Microeconomics is primarily concerned with the economic behavior of decision making units when at equilibrium
12. Opportunity costs are the values of the:
a. minimal budgets of families on welfare
b. hidden charges passed on to consumers
c. monetary costs of goods and services
d. best alternatives sacrificed when choices are made
e. exorbitant profits made by greedy entrepreneurs
13. Which of the following is the primary incentive in determining WHAT to produce in a free market price system? Produce
those products that
a. enjoy maximum freedom from government controls
b. are needed by the masses of people
c. are easiest to produce
d. will provide maximum profits for the producer
14. Factors of production (resources) include
a. land, capital, and interest
b. land, interest, and rent
c. labor, land, and capital
d. labor, capital, and profits
e. wages, rent, and interest
15. In economics, capital is best defined as:
a. produced goods which are used as productive resources
b. private property
c. money needed to run a business
d. the primary factor in productivity
16. It describes how the capitalistic economy works given the interaction between the households, who are the owners of
resources and the firms, who are the users of resources.
a. Circular Flow Model
b. Production Possibility Frontier
c. Transformation Curve
d. None of the above
17. They are the resource users who receive receipts or revenues as payment for the production and sales of goods and services.
a. Household
b. Business firm
c. Government
d. Rest of the world
18. It is an economic system in which all major decisions concerning the level of resource use, the composition and distribution of
output and the organization of production are determined by the price system.
a. Socialism
b. Communism
c. Capitalism
d. Fascism
19. It is an economic system characterized by public ownership of property resources and collective determination of economic
decisions through central economic planning.
a. Socialism
b. Communism
c. Capitalism
d. Fascism
Use the following diagram in answering the 4 items below

RESOURCE
Costs MARKET Rents,
interests,
Salaries, profit
Economic Land, capital, labor
resources
Entrepreneurial ability

BUSINESS HOUSEHOLD
FIRMS
Costs Goods and
services
20. The resource market is where
Consumption
a. household sell products
Receipt and businesses buy PRODUCT
products expenditures
s
MARKET
 b. businesses sell the resources and household buy products
c. household sell resources and businesses buy resources
d. businesses sell resources and household buy resources

21. Which of the following will be determined in the product market?

a. manager’s salary
b. the price of equipment used in a manufacturing firm
c. the price of a 30-hectare farmland
d. the price of a new pair of leather shoes
22. In this circular flow diagram
a. money flows counterclockwise
b. resources flow counterclockwise
c. goods and services flow clockwise
d. households are on the supply side of the product market
23. In the same diagram,
a. household spend income in the product market
b. firms supply resources to the household
c. household receive income through the product market
d. household produce goods

24. Allocative efficiency means that

a. opportunity cost has been reduced to zero
b. resources are allocated to the use which has the highest value to society
c. technological efficiency has not been achieved
d. only relative scarcity exists

Use the graph below to answer the next question

25. According to the graph above, a shift in the production-possibilities frontier from A-A to B-B could result from:
a. improved technology in the production of both goods
b. changes in the combination of goods produced
c. unemployment
d. inflation
e. changes in consumers' tastes
26. Which one of the following, if any, will not shift the economy's entire production possibilities frontier (PPF) outward?
a. An increase in the size of the nation's labor force.
b. An improvement in technology.
c. The printing of new money by the government which causes the price of all goods to increase.
d. An increase in the nation's capital stock of machinery and equipment.
27. The following table represents 5 points on a production possibilities frontier (PPF) for a firm which produces 2 goods, X and Y.
If the price of good Y is P10 per unit and the price of good X is P30 per unit, then which point would be most profitable to
produce?

Point Quantity of Good Y Quantity of Good X

 A 20 0
B 18 1
C 14 2
D 8 3
E 0 4

a. Point A.
b. Point B.
c. Point C
d. Point D

28. An economy is operating at a point on its production possibilities frontier (PPF). If an increase in unemployment were then to
occur, this would be shown as

a. a shift outward in the entire production possibilities frontier.

b. a movement along the given production possibilities frontier.
c. a movement to a point inside (within) the given production possibilities frontier (closer to the origin).
d. a movement to a point outside (beyond) the given production possibilities frontier.
29. Operating inside a society's production possibilities frontier is a:
a. drawback of capitalism relative to socialism
b. symptom of inefficiency or idle resources
c. way to build reserves to stimulate investment and growth
d. result whenever the capital stock depreciates rapidly
30. Which event will shift the butter/guns production possibilities frontier outward?
a. a new and superior method of producing butter
b. a decrease in the resources devoted to the production of investment goods
c. an increase in the production of guns
d. a reduction in the production of butter
31. The production possibilities frontier illustrates the basic principle that
a. the best combination of goods is achieved by allocating resources equally among them.
b. if all the resources of an economy are in use, the opportunity cost of producing more of one good is the amount of
another good forgone.
c. prices of  goods depends upon the supply and demand for them.
d. profit-motivated business firms will produce goods which maximize consumer welfare.
32. Which of the following must be satisfied in drawing the production possibilities curve?
a. fixed inputs and fixed technology
b. fixed outputs and fixed inputs
c. fixed outputs and fixed technology
d. None of the above
33. Which of the following will shift the production possibilities outward?
a. New plants and equipment are built
b. Population growth
c. Economic growth
d. Change in production technique
e. All of the above

Use the Following Graph to answer the following Question

 

34. Assume that an economy is producing only two goods: apples and butter. Suppose that a new fertilizer is invented which
greatly increases the productivity of apple trees. From the figures above, choose the one which best illustrates the change in
the production possibilities caused by this increased productivity, all other things unchanged.
a. (A)
b. (B)
c. (C)
d. (D)
e. (E)

Use the Following Graph to answer the following Question

  

35. According to the graph above, other things being equal, society's current choice of point P on the frontier will:
a. allow it to achieve more rapid economic growth than would the choice of point N
b. entail a slower rate of economic growth than would the choice of point N
c. entail the same rate of growth as would the choice of point N
d. be unobtainable because it exceeds the productive capacity of the economy

36. It formalizes the relationship between price and quantity consumers are willing to buy at those prices.
a. Law of demand
b. Law of supply
c. Demand
d. Supply
37. Customarily, when graphing, price is on the Y-axis and quantity is on the X-axis. If it is interchanged, the demand curve will be
a. sloping downwards to the right
b. sloping downwards to the left
c. sloping upwards to the right
d. D. sloping upwards to the left
38. Movements along a given demand curve are caused by changes in
 a. Income
b. Price
c. Taste and preferences
d. Related goods
e. All of the above
39. A change in demand or supply
a. is caused by a change in price
b. is represented by a movement from one point to another on the demand or supply curve
c. is caused by a change in any of the determinants of demand or supply other than price and is represented by a shift of
the entire demand or supply curve
d. none of the above
40. A change in quantity demanded or supplied
a. is caused by any of the determinants of demand or supply
b. is caused by a change in price of the good itself, when all other things remain unchanged and is represented by a
movement from one point to another on the demand or supply curve
c. is represented by a shift of the entire demand or supply curve
d. none of the above
41. The market equilibrium point for a commodity is determined by
a. the market demand
b. the market supply
c. the balancing forces of demand and supply
d. any of the above.
42. A downward shift in the demand curve will bring about
a. an increase in equilibrium quantity and an increase in equilibrium price
b. an increase in equilibrium price and decrease in equilibrium quantity
c. an increase in equilibrium quantity and a decrease in equilibrium price
d. a decrease in equilibrium price and decrease in equilibrium quantity
e. cannot be determined
43. Expectation of higher future food prices may prompt consumers to buy
a. more food in the future
b. lesser food today
c. more food today
d. none of the above
44. A sudden shift from rice to corn consumption by Filipinos will shift the
a. demand curve for corn upward and rice downward
b. demand curve for corn downward and rice upward
c. demand curve for corn and rice downward
d. demand curve for corn and rice upward
45. It is said to exist when the prevailing price of a commodity is above the equilibrium price.
a. Shortage
b. Surplus
c. Producer surplus
d. Consumer surplus
46. Commodities whose demand varies directly with money income refers to
a. substitute goods
b. complementary goods
c. normal goods
d. inferior goods
47. The relationship that exists between price and demand of independent goods
a. inverse
b. direct
c. either a or b
d. Neither a nor b
48. The relationship that exists between price and demand of substitute goods
a. inverse
b. direct
c. either a or b
d. Neither a nor b
49. Relationship between a change in supply of and equilibrium price is
 a. inverse
b. direct
c. either a or b
d. none
50. If there is an increase in the price of sugar, there will be
a. A movement along a given demand curve for sugar downwards
b. A movement along a given demand curve for sugar upwards
c. A shift of the demand curve for sugar to the right
d. A shift of the demand curve for sugar to the left.
51. If the number of cellular phone users increases, there will be
a. A movement along a given the demand curve for cellular phone downwards
b. A movement along a given the demand curve for cellular phone upwards
c. A shift of the demand curve for cell phone to the right
d. A shift of the demand curve for cell phone to the left.
52. If demand and supply both increase, equilibrium quantity will
a. Increase
b. Decrease
c. Remain unchanged
53. If the price of Good X is negatively related with the demand for Good Y, then,
a. Goods X and Y are substitutes
b. Goods X and Y are complements
c. Goods X and Y are independent
d. none of the above
54. A decrease in the supply of Good A can be systematically caused by
a. An increase in the prices of other commodities
b. An increase in the price of inputs important to the production of this good
c. A decrease in the price of inputs important to the production of this good
d. Expectation of lower future prices
55. The supply of a product is said to increase when
a. the supply curve shifts upward
b. the supply curve shifts leftward
c. the supply curve shifts downward
d. the price of the good increases
56. A technological improvement occurs in the production of gasoline. What effect would this have on the equilibrium price and
equilibrium quantity of gasoline?
a. Equilibrium price and quantity would both increase.
b. Equilibrium price would increase, but equilibrium quantity would decrease.
c. Equilibrium price would decrease, but equilibrium quantity would increase.
d. Equilibrium quantity would increase, but the effect on price is indeterminate.
57. The equilibrium quantity for good X is 20 units per day and the equilibrium price is P100 per unit. If a surplus currently exists
for good X, then
a. the price currently is less than P100 per unit, quantity supplied is greater than 20 units per day, and  quantity demanded
is less than 20 units per day.
b. the price currently is less than P100 per unit, quantity supplied is less than 20 units per day, and quantity demanded is
less than 20 units per day.
c. the price currently is less than P100 per unit, quantity supplied is less than 20 units per day, and quantity demanded is
greater than 20 units per day.
d. the price currently is greater than P100 per unit, quantity supplied is greater than 20 units per day, and  quantity
demanded is less than 20 units per day.

58. Over time it is observed that the equilibrium price of good X has increased, although the equilibrium quantity has remained
constant. It can be concluded that
a. the entire supply curve has shifted to the right while the entire demand curve has shifted to the left.
b. there have been shifts in both the entire supply and demand curves to the right.
c. there have been shifts in both the entire supply and demand curves to the left.
d. the entire supply curve has shifted to the left while the entire demand curve has shifted to the right.
59. Good X currently is at its equilibrium price of $20 per unit and its equilibrium quantity of 35 units per day. The entire supply
curve then shifts up and to the left because of a change in supply. If a price ceiling of $20 per unit is imposed by the
government, then
a. quantity demanded will remain at 35 units per day and a surplus will result.
b. quantity demanded will remain at 35 units per day and a shortage will result.
c. quantity demanded will decrease below 35 units per day and a surplus will result.
d. quantity demanded will decrease below 35 units per day and a shortage will result.
60. If the real income of a consumer decreases and, as a result, his demand for product X increases, it can be concluded that
product X is a/an
a. complementary good
b. normal good
c. inferior good
d. substitute good
61. If beer and pretzels are complementary goods, then an increase in the price of beer will result in:
a. an increase in the demand for pretzels
b. an increase in the demand for beer
c. a decrease in the demand for pretzels
d. a decrease in the demand for beer
62. If the government were to increase the tax it levies on gasoline by P0.50 per liter, this would cause a resultant
a. increase in both the equilibrium price and equilibrium quantity of gasoline.
b. decrease in equilibrium quantity of gasoline, but the effect on equilibrium price is indeterminate.
c. increase in equilibrium price of gasoline, but the effect on equilibrium quantity is indeterminate.
d. decrease in equilibrium quantity of gasoline, but equilibrium price would increase.
63. If a small increase in price will cause a large increase in the quantity supplied of good X, then the supply curve for good X is
a. relatively flat with a positive slope.
b. relatively steep with a positive slope.
c. vertical (perfectly steep).
d. relatively flat with a negative slope.
64. A government imposed price ceiling (maximum legal price) on rents in apartment in Metro Manila will create a
a. shortage if the price is set below the equilibrium price.
b. surplus if the price is set below the equilibrium price.
c. shortage if the price is set above the equilibrium price.
d. surplus if the price is set above the equilibrium price.
65. The price of lettuce rose 70 percent during the 1970's and, as a result, sales of salad dressing fell by more than 25 percent. In
economic terms:
a. the cross elasticity of demand is negative indicating the two goods are substitutes
b. the price elasticity of supply for salad dressing is low
c. salad dressing has low price elasticity of demand
d. the cross elasticity of demand is negative indicating these are complementary goods
66. Which of the following statements is correct?
a. If supply curve shifts to the right while demand curve shifts to the left, equilibrium price will rise
b. If supply curve shifts to the right while demand curve shifts to the left, equilibrium price will fall
c. If supply curve shifts to the left while demand curve shifts to the right, equilibrium price will fall
d. If demand curve shifts to the right while supply curve is unchanged, equilibrium price will fall

For the next four (4) items, consider the following demand and supply equations for buko pie
Qd = 750 – 15P Qs = -150 + 30P

where Qd = quantity demanded of buko pie

Qs = quantity supplied of buko pie
P = price of buko pie
67. The equilibrium price of buko pie is
A. 15
B. 5
C. 20
D. 90
E. Cannot be determined without additional information
68. The equilibrium quantity of buko pie is
A. 45
 B. 450
C. 4.5
D. cannot be determined without additional information
69. Surplus of buko pies will occur if
A. Its price will be higher than the equilibrium price
B. Its price will be lower than the equilibrium price
C. There will be additional buko pie outlets
D. There will be less buko pie outlets
E. cannot be determined without additional information
70. Shortage of buko pies will occur if
A. Its price will be higher than the equilibrium price
B. Its price will be lower than the equilibrium price
C. There will be additional buko pie outlets
D. There will be less buko pie outlets
E. cannot be determined without additional information

Refer to the following hypothetical table for the next three (3) items

QD Price QS
80 4.80 73
75 5.00 75
70 5.20 77
65 5.40 79
60 5.60 81
71. If the price increases from P 4.80 to P 5.20, the price elasticity
of the product will be
A. -1.67 and the product has inelastic demand
B. -1.67 and the product has elastic demand
C. -0.6 and the product is elastic
D. -0.6 and the product is inelastic
72. The Total Revenue can be determined by multiplying
A. QD and price
B. QS and price
C. QD and QS
D. Cannot be determined
73. The Total Revenue at market equilibrium is
A. 375
B. 384
C. 364
D. 351
E. None of the above
74. If an outlet or store sells 250 bottles of Bench Body Spray per month when the price is P100 and sells 200 bottles when the
price is P125, the price elasticity of demand is
a. -1.0 and demand is inelastic
b. -1.0 and demand is unitary elastic
c. >1 and demand is elastic
d. <1 and the demand is inelastic

Refer to the following hypothetical table for the next three (3) items

Price per pc Quantity Income (P/mo)

(P) (pc)
Dec 2006 2.00 100 5,000

75. Jan 2007 2.00 120 4,000 The table shows that
a. As income decreases from December to January, more pandesal was purchased
b. As income increases from December to January, more pandesal was purchased
c. More pandesal was purchased in January because the Christmas season is over.
d. Income of the household is positively related with their demand for pandesal.
76. With the available information, the income elasticity of pandesal will be
a. positive and greater than one to prove that pandesal is a luxury good.
b. positive but less than one to prove that pandesal is a necessity.
c. Negative to prove that pandesal is an inferior good.
77. If the cross elasticity of demand between peanut butter and cheese spread is 1.80, we can say that
a. Peanut butter and cheese spread have elastic demand
b. Peanut butter and cheese spread are both normal goods
c. Peanut butter and cheese spread are substitute goods
d. Peanut butter and cheese spread are complementary goods
78. Which one of the following will cause the demand curve for gasoline to shift to the right?
a. a fall in the price of cars
b. an increase in the supply of gasoline
c. a fall in the price of gasoline
d. a rise in the price of cars
79. An increase in supply will leave the price unchanged unless
a. Supply is perfectly elastic
b. Demand is perfectly elastic
c. Demand is highly inelastic
80. A vertical supply curve can be associated with
a. Perfectly elastic supply
b. Perfectly inelastic supply
c. Short run supply curve
d. Long run supply curve
e. none of the above
81. Good X is a necessity and there are no close substitutes available for it. If the price of good X were increased by 25%, then the
producers of good X can expect that

a. quantity demanded would decrease by more than 25% because demand is elastic.
b. quantity demanded would decrease by more than 25% because demand is inelastic.
c. quantity demanded would decrease by less than 25% because demand is elastic.
d. quantity demanded would decrease by less than 25% because demand is inelastic.

82. Recent studies have confirmed that the demand for electricity is inelastic. As the price of electricity increases,

a. total pesos spent by consumers on electricity will increase because the percentage increase in quantity demanded will be
greater than the percentage increase in price.
b. total pesos spent by consumers on electricity will increase because the percentage increase in quantity demanded will be
less than the percentage increase in price.
c. total pesos spent by consumers on electricity will decrease because the percentage decrease in quantity demanded will
be greater than the percentage increase in price.
d. total pesos spent by consumers on electricity will increase because the percentage decrease in quantity demanded will
be less than the percentage increase in price.

83. Which of the following characteristics will tend to make the demand for good X most inelastic?

a. Good X represents a small share of most consumers’ budgets and there are many close substitutes available for it.
b. Good X represents a small share of most consumers’ budgets and there are no close substitutes available for it.
c. Good X represents a large share of most consumers’ budgets and there are many close substitutes available for it.
d. Good X represents a large share of most consumers’ budgets and there are no close substitutes available for it.
84. Two goods are complements in consumption if:
a. both are inferior goods
b. the cross elasticity of demand between them is negative
c. both have negative price elasticities
d. one has a positive elasticity and the other has a negative price elasticity
85. Which of the following would result in an increase in the supply of good A?
a. An increase in the price of A's substitute
b. An increase in the prices of resources used to produce good A
c. Technological advancement applicable to the production of A
 d. A reduction in the price of A
86. If an increase in the price of good X causes the demand for good Y to decrease, it can be concluded that
a. X and Y are substitutes
b. X and Y are complements
c. X and Y are inferior goods
d. X and Y are superior goods
e. there is collusion in the market place
87. Substitution and income effects of a change in the price of a good may help explain the
a. direct relationship between income and demand
b. direct relationship between price and quantity supplied
c. direct relationship between price and quantity demanded
d. inverse relationship between price and quantity demanded
88. The income effect of a price change arises because
a. as price falls or rises there is an effect similar to an income increase or decrease
b. the effect of taxes on government revenues
c. higher or lower prices affect suppliers incomes
d. as the price of a good rises or falls buyers feel their incomes have fallen due to inability to recall the previous price and a
suspicion regarding all price changes
89. An increase in demand accompanied by a simultaneous decrease in supply will result in
a. a change in equilibrium quantity
b. a decrease in equilibrium quantity
c. a decrease in equilibrium price
d. an increase in equilibrium price
e. an increase in equilibrium quantity
90. When the price of a certain good increases by 30%, quantity demanded decreases by 2%. What is the price elasticity of
demand?
a. 15
b. 30
c. 1/15
d. 2
91. If goods R and K have a cross elasticity of -5 and goods R and S have a cross elasticity of 5,
a. R and K are substitutes; R and S are complements
b. R and K are complements; R and S are substitutes
c. K is price inelastic
d. S is price inelastic
e. R and K are normal goods; R and S are inferior goods

92. Which of the following is not a determinant of the price elasticity of demand?
a. the price elasticity of supply
b. whether the product is a necessity
c. whether the product is a luxury
d. the time period in question
93. Suppose the price of a certain good fell from $1 to $.50 and the quantity demanded increased from 250 to 750 units. Over this
range of the demand curve, the elasticity of demand is:
a. 1
b. .75
c. 1.5
d. 1.2
94. Suppose the law prohibiting possession of marijuana in quantities of less than one ounce were abolished and at the same
time penalties for the production or sale of marijuana were increased. As a result of these two changes, the demand for
marijuana would (increase/decrease) and the supply of marijuana would (increase/decrease), the price of marijuana then
should (rise/fall/neither rise nor fall).
a. decrease, decrease, neither
b. decrease, increase, fall
c. increase, decrease, rise
d. increase, decrease, neither

95. The demand of coffee is likely to increase when

 a. The price of tea increases
b. The price of coffee increases
c. Coffee is linked to cancer by new research
d. Income level of population drops
96. A change in which of the following will NOT change the demand for rental housing?
a. Family size
b. Rental price
c. Consumer’s income
d. Growth in the community
97. If you were a government official and wanted to raise the price of soybean without imposing a price support, which of the
following actions will you take?
a. Take soybean from the government storage and sell it on the open market
b. Encourage farmers to use more fertilizer in order to produce more soybean
c. Try to lower the price of milk
d. Encourage the farmers to grow less soybean
98. Given the standard supply-and-demand diagram, which of the following statements is correct? (Hint: draw diagrams)
a. If supply shifts left and demand remains constant, equilibrium price will fall
b. If supply shifts right and demand remains constant, equilibrium price will rise
c. If demand shifts left and supply shifts right, equilibrium price will rise
d. If supply shifts right and demand shifts right even more, equilibrium price will fall.
e. none of the above
99. A change in supply cannot be caused by
a. a change in the price of inputs.
b. an increase in the number of consumers.
c. changes in the profitability of producing other products.
d. an improvement in technology.
100.Which of the following statements is correct?
a. If supply curve shifts to the right while demand curve shifts to the left, equilibrium price will rise
b. If supply curve shifts to the right while demand curve shifts to the left, equilibrium price will fall
c. If supply curve shifts to the left while demand curve shifts to the right, equilibrium price will fall
d. If demand curve shifts to the right while supply curve is unchanged, equilibrium price will fall