2.4 Surplus and Shortage

Multiple Choice

What is the significance of equilibrium in a market where supply and demand interact?

• It ensures that all goods are sold at the highest price.

• It balances the quantity demanded and supplied at a particular price.

• It always leads to a surplus in the market.

• It prevents shortages from ever occurring.

Multiple Choice

At what price and quantity do the supply and demand curves intersect to form the equilibrium in this market?

• $3 and 30 units

• $4 and 40 units

• $2 and 50 units

• $5 and 10 units

Multiple Choice

Which of the following statements about equilibrium is correct?

• At equilibrium, quantity supplied equals quantity demanded.

• At equilibrium, there is always a surplus.

• At equilibrium, price is always $5.

• At equilibrium, quantity demanded is less than quantity supplied.

Multiple Choice

What happens to the market if the price is set above the equilibrium price, such as at $4?

• There will be a surplus because quantity supplied exceeds quantity demanded.

• There will be a shortage because quantity demanded exceeds quantity supplied.

• The market will remain in equilibrium.

• Both supply and demand will decrease.

Multiple Choice

What is the relationship between surplus and price in a market?

• Surplus increases as prices decrease

• Surplus is created by high prices for goods or services

• Surplus is unrelated to price

• Surplus decreases as prices increase

Multiple Choice

Which of the following situations is most likely to result in a shortage?

• High prices for goods and services

• Low prices for goods and services

• Equilibrium prices

• Surplus of goods and services

Multiple Choice

What happens in a free market when there is a surplus of goods?

• Producers raise prices

• Producers lower prices

• Consumers stop buying

• Government intervenes

Multiple Choice

Which of the following statements about price floors and price ceilings is correct?

• A price floor sets a legal maximum price for a product.

• A price ceiling sets a legal minimum price for a product.

• A price floor sets a legal minimum price buyers must pay for a product.

• A price ceiling sets a legal minimum price sellers may charge for a product.

Multiple Choice

What is the main economic effect of setting a price ceiling below equilibrium price, as shown in the gasoline market diagram?

• It creates a surplus of gasoline.

• It creates a shortage of gasoline.

• It increases the equilibrium price.

• It eliminates the need for government intervention.

Multiple Choice

A price ceiling is only binding if it is set ___ the equilibrium price.

• below
• above

• at equilibrium

• to the side

Open Ended

Reflecting on today's lesson about equilibrium, what is one question you still have or something you would like to know more about regarding how supply and demand interact in markets?

Multiple Choice

What is the definition of equilibrium in the context of supply and demand?

• Where quantity demanded equals quantity supplied at a particular price

• Where supply is always greater than demand

• Where demand is always greater than supply

• Where prices are fixed by the government