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Lesson 6: Markets, Equilibrium, and Prices Flashcards | StudBud
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Lesson 6: Markets, Equilibrium, and Prices
Lesson 6: Markets, Equilibrium, and Prices
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1
The purpose of
rationing
during
World War II
was to ensure that
manufacturers could make a profit.
products would go to those who valued them most.
workers would have an incentive to get jobs.
everyone could get essential scarce goods.
2
The
equilibrium price
is the price at which
consumers start reducing demand.
producers' total revenue is highest.
neither demand nor supply will shift.
demand and supply curves intersect.
3
What is the usual result of setting a
price ceiling
on
rents
?
Construction jobs increase with the building of new apartment buildings.
People can find apartments but cannot afford to rent them.
Houses are broken up into apartments to meet the demand.
More people want to rent apartments than are available to rent.
4
Why is it often difficult for the government to end price controls?
all the above
The government usually intervenes when prices rise and fall too rapidly.
Many people believe that price controls further the goal of economic equity
Politicians are reluctant to repeal price control when voters support them.
5
How is the
market-clearing
(market-balancing)
price
determined?
It is reached through trial and error.
It is set by a government commission.
It is fixed by each manufacturer.
It is calculated by economic analysts.
6
Which of the following is an example of a
supply shifter
?
an increase in the cost of inputs
rising unemployment
a spike in the population
changing consumer tastes
7
A juice bar produces a
smoothie
that is
wildly popular
, and they
cannot keep up with demand
. What should they do?
hire more staff to make smoothies more quickly
buy the additional supplies needed to make more smoothies
all the above
raise the price of the smoothies
8
An example of when the government might
impose rationing
is
when it establishes a minimum wage for labor.
when farmers have produced more grains than people demand.
when it hopes to stimulate the economy by urging people to spend money.
when essential, but high-demand, goods are in short supply.
9
If a manufacturer introduces a new product with a
successful ad campaign
and a
low introductory price
, what happens?
shortage
equilibrium
surplus
rationing
10
At the
farmers market
, what happens when
watermelons
reach their
equilibrium price
?
Customers will buy all of the melons that farmers are selling.
Most farmers will take home extra unsold watermelons.
Many customers who want watermelons will go home empty-handed.
Farmers will be unable to sell any watermelons at all.
11
Which of these might best
signal
furniture makers to
cut back production
?
a drop in the price consumers are willing to pay
a fall in the cost of essential raw materials
an increase in availability of skilled workers
an introduction of competitors into the market
12
Which of these situations best illustrates
market equilibrium
?
Soap production ensures a good profit for the manufacturer.
The price of soap does not vary much from week to week.
The amount of soap made matches the amount of soap that people want to buy.
Everyone who wants or needs soap can easily afford to buy it.
13
If medical research identified
blueberries as a powerful "brain food,"
what would happen
next
?
The demand curve for blueberries would shift to the right.
The demand curve for blueberries would shift to the left.
The demand curve for blueberries would shift downward.
The demand curve for blueberries would shift upward.
14
The most important
argument
many economists make
against price controls
is that they are
inefficient.
unfair.
unstable.
insecure.
15
What leads to
excess demand
?
Prices increase more than consumers are willing to pay.
More people want a good or service than producers can supply.
The supply of a good or service is equal to the amount consumers want.
Sellers decrease the prices of their goods or services.
16
Markets
are governed by
price controls.
excess demand.
the law of supply and demand.
disequilibrium.
17
A
price floor
is
the exact amount it costs to produce a good, without making a profit.
a legal minimum price consumers are required to pay for a good or a service
an illegal market with much higher prices due to shortages
the price at which the demand matches the supply of that good or service.
18
What would happen if a farmer sells
her entire supply of watermelons
in the
first hour
the farmers market is open?
She will stop selling melons and sell other produce instead.
She will raise her prices at the next farmers market.
She will bring fewer melons to sell at the next farmers market.
She will sell melons at a lower price at the next farmers market.
19
Which event in
Florida
and
California
would most likely shift the
supply curve
for
orange juice
to the
left
?
rise of mango juice as a popular breakfast drink
evidence that citrus fruit strengthens bones
an early frost accompanied by ice storms
an influx of new low-wage workers
20
New Deal programs
offered employment
during the
Great Depression
. These programs were designed to respond to
a shortage of skills.
an excess of services.
a surplus of workers.
a lack of incentives.
