Econ Chapter 6 Price: Supply and Demand Together

At the equilibrium price, which of the following is true?

A price ceiling creates a shortage in the market.

If a shortage exists, sellers are likely to raise the price of the good.

In general, no matter where you go in the U S, the price of bread is approximately the same.

In a free enterprise market, who or what allocates resources?

Restaurant servers frequently earn minimum wage because there is low demand for them.

Two possible solutions to traffic congestion are building more freeways and charging a toll.

Before 1989 in the Soviet Union, officials frequently set prices at market equilibrium.

When the quantity demanded is greater than quantity supplied, a shortage exists in the market.

Higher demand means higher prices.

A legal maximum price at which a good can be sold is a

If everything else remains the same and demand increases, prices will likely drop.

Supply and demand go together to determine price.

If a greater supply of labor were combined with decreased demand for labor, we might expect

Equilibrium can be expressed as

When a surplus occurs, producers will not be able to sell all they had hoped to sell.

A price ceiling is a legislated maximum price that is above the equilibrium price.

It is possible for price to change without a change in supply or demand.

What graph shows what would happen if producers are informed that the cost of sugar has doubled

If all markets were in equilibrium, this would indicate that buyers and sellers are happy.

In economics, when quantity supplied is greater than quantity demanded, a shortage exists.

Prices will usually rise when there is an increase in demand.

One of the most important functions of price is to send signals to buyers and sellers.

If all else remains the same, a decrease in the demand for a good

Price controls

For equilibrium to change, supply or demand would have to change.

When there is a surplus, prices tend to rise.

Which of the following is true when there is a shortage in the market?

An unintended effect of a price floor could be a surplus.

Inventories of suppliers grow beyond the normal level during periods of shortage.

When there is a surplus in the market, which of the following is true?

If there were a shortage of nurses, we would expect

Equilibrium exists in all markets, all the time.

Inventory includes which of the following?

Price directs the allocation of resources away from some goods, toward others.

Decision makers in Washington, D.C., decide how much corn will be grown in the United States.

A price floor is a legislated minimum price that is below the equilibrium price.

During a shortage, price and output rise until equilibrium is achieved.

The winning combination for a high salary is high supply and low demand for a job.

A price floor results in