3.4 Market Equilibrium, Surplus and Shortages & Price Controls

Multiple Choice

What happens at market equilibrium?

• There is no shortage or surplus

• There is always a surplus

• There is always a shortage

• Only producers are satisfied

Open Ended

Explain how the equilibrium point is determined using a supply and demand graph.

Multiple Select

Which of the following are true about surplus (excess supply)?

• Occurs when quantity supplied is greater than quantity demanded

• Price is above equilibrium

• Sellers cannot sell all their products

• Market pressure pushes price up

Multiple Choice

Which of the following is an example of surplus (excess supply)?

• Housing market crash (too many homes, not enough buyers)

• A sudden increase in demand for electronics

• A drought causing crop failure

• A popular concert selling out quickly

Fill in the Blanks

A shortage occurs when the quantity demanded is

than the quantity supplied.

Multiple Choice

Which of the following is an example of a shortage?

• Concert tickets for popular artists

• Discounted clothing during a sale

• Old model smartphones in clearance

• Seasonal fruits in peak season

Multiple Choice

Based on the graphs, what happens to the market when the price is set above the equilibrium price?

• A surplus occurs because supply exceeds demand

• A shortage occurs because demand exceeds supply

• The market reaches equilibrium

• Both supply and demand decrease

Multiple Choice

Price controls are government-imposed limits on how high or low a price can be charged for a product or service. What are the two types of price controls mentioned?

• Price ceiling and price floor

• Price cap and price base

• Maximum price and minimum price

• Price limit and price support

Fill in the Blanks

A price ceiling is only effective when set

the equilibrium price.

Multiple Choice

In the context of rent control, what is the likely consequence of setting a price ceiling below the market equilibrium for apartments?

• A housing shortage will occur

• There will be a surplus of apartments

• Rent prices will rise above equilibrium

• Landlords will increase supply

Multiple Choice

Which of the following are considered winners when a price ceiling is imposed?

• Consumers who can find and purchase the product at the lower price

• Producers who receive higher prices

• Consumers who cannot find the product

• Government agencies

Fill in the Blanks

Fill in the blank: One unintended consequence of price ceilings is the development of

markets.

Multiple Choice

Which of the following statements about price floors is correct?

• Price floors are only effective when set above the equilibrium price.

• Price floors benefit all consumers.

• Price floors always reduce surpluses.

• Price floors eliminate the need for government intervention.

Multiple Select

Which of the following groups benefit from price floors?

• Workers who keep their jobs at higher wages

• Consumers who pay lower prices

• Producers who can sell at higher prices

• Government agencies

Open Ended

Reflecting on today's lesson about market equilibrium, surplus, shortages, and price controls, what is one question you still have or one concept you would like to explore further?