The chart shows demand and supply curves for gas. According to the chart, there is a surplus of

about 5 million gallons per week at a price $2.50 per gallon

An economist would probably say that prices set by supply and demand are primarily measures of

the relative scarcity of goods or services

The market-clearing price is the price at which

quantity supplied equals quantity demanded

Which best explains why the price of a particular toy might FALL just before December 25th?

Sellers produced a surplus of the toy

An economist would probably agree that demand and supply schedules are PRIMARILY based on

decisions made by consumers and producers in a market

Which will most likely result in a decrease in a product's equilibrium price?

an increase in supply, but no change in demand

If the conditions listed were part of the economy, which would be the most likely result?

a surplus in the supply of milk

Chart shows demand and supply curves for milk. According to the chart, there is a shortage of

about 4 million gallons per week at a price $1.00 per gallon

In economics, a shortage of a product occurs when

the product's price falls below its market-clearing level

The market equilibrium price is the price at which

the quantity demanded is the same as the quantity supplied

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JA Econ Ch. 5

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Questions 19

Answers

1
When demand and supply for a product are equal, which of the following is most likely true?
All of the above
The product's market clears
The product's price will fall
The product is scarce
2
If the conditions listed were part of the economy, which of these would be the likely result?
consumers would have false information about the supply
producers would have less incentive to make ice cream
price would play a smaller role in rationing the amount
all of the above
3
During one month, the price of a product rose 20%. This is most likely because of an increase
in producer outputs
in consumer demand
in short-term supply
in worker efficiency
4
The chart shows demand and supply curves for gas. According to the chart, there is a surplus of
about 4 million gallons per week at a price $2.00 per gallon
about 3 million gallons per week at a price $1.00 per gallon
about 5 million gallons per week at a price $2.50 per gallon
about 2 million gallons per week at a price $1.50 per gallon
5
Which economic system will product shortages or surpluses usually result in rapid price changes
traditional economy
market economy
none of the above
command economy
6
Market-clearing or equilibrium prices are important in a free enterprise economy because they
provide information about producer costs and consumer wants
provide incentives for people to produce goods and services
help to ration available goods and services
all of the above
7
Which of these responses would most accurately complete the sentence
incentives, disincentives
efficiency, elasticity
shortage, surpluses
surpluses, taxation
8
An economist would probably say that prices set by supply and demand are primarily measures of
the amount of volatility in the market
the level of regulation in the economy
the relative scarcity of goods or services
the effects of government subsidies
9
The market-clearing price is the price at which
producers decide to sell their goods in the market
government officials decide to stabilize the market
quantity supplied equals quantity demanded
quantity supplied exceeds quantity demanded
10
Which best explains why the price of a particular toy might FALL just before December 25th?
Sellers failed to produce enough toys to meet demand.
Sellers produced a surplus of the toy
Buyers preferred the toy to others on the market
Buyers caused a shortage of the toy
11
An economist would probably agree that demand and supply schedules are PRIMARILY based on
relative elasticity of most consumer needs and wants
government intervention in setting prices
methods of improving business efficiency
decisions made by consumers and producers in a market
12
In a market economy, which would be the most likely result of the events listed
a nationwide surplus of soybeans
none of the above
a lower average price for soybeans
an increase in soybean consumption
13
Which will most likely result in a decrease in a product's equilibrium price?
an increase in demand, but no change in supply
an increase in supply, but no change in demand
an equal increase in both supply and demand
an equal decrease in both supply and demand
14
If the conditions listed were part of the economy, which would be the most likely result?
a shortage in the demand of milk
an increase in the demand for milk
a surplus in the supply of milk
a decrease in the production of milk
15
Chart shows demand and supply curves for milk. According to the chart, there is a shortage of
about 2 million gallons per week at a price $2.50 per gallon
about 1 million gallons per week at a price $1.50 per gallon
about 4 million gallons per week at a price $1.00 per gallon
about 3 million gallons per week at a price $2.00 per gallon
16
In economics, a shortage of a product occurs when
the businesses producing the product become less efficient
the people who buy the product consume more than they need
the product's market-clearing level reduces overall demand
the product's price falls below its market-clearing level
17
According to the chart, the market-clearing price is
$2.50
$0.75
$1.50
$1.00
18
In a market economy, prices are affected by all of the following EXCEPT
scarcity
supply
demand
welfare
19
The market equilibrium price is the price at which
surpluses depress the number of goods supplied
the quantity demanded is the same as the quantity supplied
shortages and surpluses will have no effect on the market
the government will not intervene in the market

JA Econ Ch. 5 Flashcards | StudBud