Equilibrium

Identify which of the following is an example of a shortage. A. No snow shovels are available when a blizzard is forecast. B. Snow shovel prices rise as a blizzard is forecast. C. Food prices fall as a blizzard is forecast. D. Snow shovels this year cost more than they did last year.

A. No snow shovels are available when a blizzard is forecast.

Which of the following is true of a normal good? The quantity demanded falls as the price falls. The quantity demanded falls as the price rises. The quantity demanded rises as the price rises. The demand curve shifts to the right as the price falls.

The quantity demanded falls as the price rises.

Shortages: Typically cause prices to fall. generally occur after surpluses. are usually indicated by high prices. are usually the product of price controls.

are usually the product of price controls.

Refer to the graph. Suppose the market price is $1.50. What is the size of the shortage or surplus in this market at $1.50? a. A shortage of 400 b. A shortage of 700 c. A surplus of 400 d. A surplus of 700

b. A shortage of 700

_________ results in increased scarcity and inefficiency in the production of a good or service

disequilibrium

The quantity traded when the quantity supplied of a good, service, or resource equals the quantity demanded is the _____ quantity. market demanded supplied equilibrium

equilibrium

When the quantity supplied of a good, service, or resource equals the quantity demanded, this quantity traded is known as the: equilibrium quantity. equilibrium price. absolute quantity. expected quantity.

equilibrium quantity.

A surplus is sometimes called: excess price control. excess demand. excess consumption. excess supply

excess supply

A situation in which the quantity of output demanded is greater than the quantity of output supplied at the current market price is called a

shortage

When the government sets the price below market equilibrium, there will be a(n) _________ in the market.

shortage

The price that consumers pay and that producers receive exactly balances the marginal benefit and marginal cost of consuming and producing a good or service when: the market is in flux. the market is in equilibrium. consumers are making choices. firms are earning profits.

the market is in equilibrium.

A surplus occurs when: A. the quantity of output supplied is greater than the quantity of output demanded at the current market price. B. the quantity of output demanded is greater than the quantity of output supplied at any market price. C. the quantity of output demanded is greater than the quantity of output supplied at the current market price. D. the quantity of output supplied is greater than the quantity of output demanded at the base year price.

A. the quantity of output supplied is greater than the quantity of output demanded at the current market price.

When the market is in equilibrium, the price that consumers pay and that producers receive: A. must make sure that there is a marginal benefit and marginal cost of consuming and producing a good or service. B. balances the marginal benefit and marginal cost of consuming and producing a good or service. C. cannot equal the marginal benefit and marginal cost of consuming and producing a good or service. D. ensures that the marginal benefit exceeds the marginal cost of consuming and producing a good or service.

B. balances the marginal benefit and marginal cost of consuming and producing a good or service.

When the market is in equilibrium, the price that consumers pay and that producers receive exactly balances the A. total benefit and total cost of consuming and producing a good or service. B. marginal benefit and marginal cost of consuming and producing a good or service. C. marginal benefit and total cost of consuming and producing a good or service. D. total benefit and marginal cost of consuming and producing a good or service.

B. marginal benefit and marginal cost of consuming and producing a good or service.

Which of the following is not true of equilibrium? A. Changes in the determinants of demand change the equilibrium price. B. Changes in the determinants of supply change the equilibrium price. C. Price and quantity will never change. D. Adjustments by buyers and sellers move the market toward equilibrium.

C. Price and quantity will never change.

The price that balances demand and supply is called the: A. market position. B. equilibrium quantity. C. equilibrium price. D. expected price.

C. equilibrium price.

If the quantity supplied equals the quantity demanded: A. the market price cannot change. B. equilibrium will stay the same if there are only market forces acting on it. C. equilibrium will stay the same if all else is equal. D. the market quantity cannot change.

C. equilibrium will stay the same if all else is equal.

Shortages and surpluses are represented by the: A. vertical distance between the market price and the equilibrium price. B. horizontal distance between the market price and the equilibrium price. C. horizontal distance between the quantity demanded and the quantity supplied. D. vertical distance between the quantity demanded and the quantity supplied.

C. horizontal distance between the quantity demanded and the quantity supplied.

Which of the following is not true of equilibrium? A. Adjustments by buyers and sellers move the market toward equilibrium. B. Changes in the determinants of supply change the equilibrium price. C. Changes in the determinants of demand change the equilibrium price. D. Price and quantity will never change.

D. Price and quantity will never change.

A situation in which the quantity of output supplied is greater than the quantity of output demanded at the current market price is called a _____. A. shortage B. equilibrium C. demand D. surplus

D. surplus

Equilibrium means that: A. the price and the quantity will never change. B. the factors that affect supply and demand do not change. C. we should expect to see the price and the quantity converge at historic levels. D. we should expect to see the price and the quantity converge at specific levels.

D. we should expect to see the price and the quantity converge at specific levels.

The price that balances demand and supply is called the _______ price.

Equilibrium