Price System

The point at which quantity supplied and quantity demanded are the equal at the same price. 

• The magic point
• Equilibrium point
• Market place
• Price flx

A government may institute a price floor, which will likely lead to ________ of a good or service.

• a surplus
• a shortage
• an abundance
• an externality

When someone benefits from the consumption or production of a good or service, but they do not bear the cost.  

• negative externality
• Market equilibrium
• positive externality
• the invisible hand

In order to reduce shortages, business owners will likely ____ prices. 

• increase 
• decrease
• set
• fix

In the market/price system, __________ determine the prices of goods and services. 

• buyers 
• sellers
• buyers and sellers

If supply increases, but demand remains unchanged, which will be the result?

• Equilibrium price and quantity will decrease. 
• Equilibrium price will increase, but quantity will decrease
• Equilibrium price will decrease, and eq. quantity will increase

If demand increases, but supply remains unchanged, which is the result?

• Equilibrium price and quantity will increase, 
• Equilibrium price and quantity will decrease
• Equilibrium price will decrease, and quantity will increase.

The price system distributes all of the following efficiently except for 

• gasoline
• breakfast cereal
• clothing
• police protection

The author of the invisible hand, ________, would be in support of the free market system.

• Adam Smith
• Adam Gates
• Barack Obama
• John Stossel

A price ceiling will lead to a ______. 

• shortage
• surplus
• positive externality