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Chapter 6 Market Equilibrium Flashcards | StudBud
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Chapter 6 Market Equilibrium
Chapter 6 Market Equilibrium
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A review of the economic concept of Market equilibrium
Flashcards
37 cards
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Practice quiz
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Questions
37
Answers
1
When QD >QS at Current price, what happens to price?
price stays the same
price falls
Price rises
2
What happens to equilibrium P & Q if there is an increase in supply and demand?
Quantity decreases, Price not sure?
Quantity increases, Price not sure?
Quantity decreases, Price stays the same
Quantity increases, Price stays the same
3
How do we get to market equilibrium when there is a price that creates a surplus?
QS increases as supplies increase price
QD decreases, buyers are afraid of lower prices.
QS decreases as suppliers lower price, get rid of surplus,
QD increases,buyers come back to the market for lower prices
4
The market equilibrium price is the price at which
consumers start reducing demand.
demand and supply curves intersect.
producers' total revenue is highest.
neither demand nor supply will shift.
5
What happens to equilibrium P & Q if there is an increase in supply and decrease in demand?
Quantity stays the same, Price increases
Quantity not sure, Price increases
Quantity not sure?, Price decreases
6
When QS > QD at current price, what happens to price?
Price increases
price falls
Price stays the same
7
All the following are the conditions that exist in the market at any time...
shortage, surplus, market equilibrium
market equilibrium, surplus
shortage, market equilibrium
shortage or surplus
8
Minimum wage is an example of a
Black Market
Price Ceiling
Price Floor
9
How do we get to market equilibrium when there is a price that creates a shortage?
QS decreases as suppliers decrease production
QS increases as suppliers increase production of more G&S
Shortage of demand forces producers to lower price.
excess eliminated as buyers drop out& search for substitutes
10
What can change market equilibrium?
The determinants of supply and demand
Change in the price of QD
Change in price of QS and QD
Change in price of QS
11
If there is an increase in demand in a market in equilibrium, what will happen to P & Q?
Price & Quantity stays the same
Price increases, Quantity decreases
Price increases, Quantity increases
Price & Quantity decrease
12
The most important argument many economists make against price controls is that they are
unfair
insecure
inefficient
unstable
13
When shortage exists in a market, price is
below equilibrium price
above equilibrium price
higher than quantity demanded
lower than quantity demanded
14
What is the main form of communication between producers & consumers in a free enterprise mkt?
Prices
Costs
Incentives
Profits
15
Prices reflect what people are willing to pay for something & is the best way to ration a good.
False
True
16
Over time, a price floor may cause
rationing
shortage
government interference
surplus
17
What is the market clearing price or equilibrium price
Price where QS>QD
Price where QS<QD
price where markets will be cleared shortage & surpluses—P*
18
What is it when quantity supplied equals quantity demanded(QS =QD) ?
Market Equilibrium
Surplus
Shortage
19
What happens to equilibrium P & Q if there is an decrease in supply and demand?
Quantity decreases, Price not sure?
Quantity increases, Price stays the same
Quantity decreases, Price stays the same
Quantity increases, Price not sure?
20
Critics charge that non-price rationing is an unwise economic policy because it…
is expensive
is unfair
all of the choices
creates black markets
21
If there is an decrease in supply in a market in equilibrium, what will happen to P & Q?
Price & Quantity decrease
Price increases, Quantity increases
Price increases, Quantity decreases
Price & Quantity stays the same
22
When QS>QD at current price, what condition in the market do we have,& what happens to price?
shortage, and price tends to fall
shortage, where price tends to rise
surplus, and price tends to rise.
surplus, and price tends to fall
23
When QD>QS at Current price what condition in the market do we have,&what happens to price?
. surplus, and price tends to fall
shortage, and price tends to rise
nothing changes
nothing changes and market equilibrium results
24
If there is an increase in supply in a market in equilibrium, what will happen to P & Q?
Price & Quantity decrease
Price decreases, Quantity increases
Price & Quantity stays the same
Price increases, Quantity decreases
25
What do we call it when quantity demanded exceeds quantity supplied(QD>QS)--excess demand?
shortage
market equilibrium
surplus
26
What is the usual result of setting a price ceiling on rents?
Houses are broken up into apartments to meet the demand.
Construction jobs increase with building new apartments
More people want to rent apartments than are available.
People can find apartments but cannot afford to rent them
27
The system in which a government or other institution decides how to distribute a G or S is...
called a price floor
called equilibrium
called non-price rationing
called a price ceiling
28
If there is an decrease in demand in a market in equilibrium, what will happen to P & Q?
Price & Quantity decrease
Price increases, Quantity increases
Price & Quantity stays the same
Price increases, Quantity decreases
29
What is Market Equilibrium?
situation where QS &QD for a product are equal at same P & Q
The point where quantity supplied > quantity demanded
The point where quantity supplied < quantity demanded
The point where the supply curve and demand curve intersect
30
A government regulation that sets a maximum price for a particular good is called a…
Black Market
Price Floor
Price Ceiling
31
How is the market-clearing price determined?
Trial and error
It is fixed by each manufacturer.
It is calculated by economic analysts.
It is set by a government commission.
32
Governments sometimes set price to
protect producers and consumers from dramatic price swings.
increase the demand for a particular product
ensure there will be an adequate S of G for consumers to buy
33
Product Prices are determined by interaction of supply & demand.
False
True
34
What happens to equilibrium P & Q if there is an decrease in supply and increase in demand?
Quantity not sure?, Price decreases
Quantity not sure, Price increases
Quantity stays the same, Price increases
35
The market's use of price to ration and eliminate surplus & shortage is an example of
Donald trump's capitalism working
Henry de Saint Simon's socialism working
Karl Marx's communism working
Adam Smith's invisible hand working
36
A government regulation that sets a minimum price level for prices is called a
Price floor
black market
price ceiling
37
What is it when quantity supplied exceeds quantity demanded(QS > QD) excess supply?
Market Equilibrium
Surplus
Shortage
