Ch 6

Equilibrium price is the price at which the quantity of a product demanded by consumers and the quantity supplied by producers

• are different.
• are equal.
• is higher for the product demanded.
• is higher for the product supplied.

On the market demand and supply graph, the point of market equilibrium always happens 

• at the highest point on the demand curve.
• where the demand and supply curves intersect.
• at the lowest point of the supply curve.
• at the center point of the graph, irrespective of the curves.

When there is a shortage, producers raise prices in an attempt to

• separate the quantity supplied and demanded.
• raise the quantity demanded.
• equalize the quantity supplied and demanded.
• lower the quantity supplied.

In the price system of a market economy, prices are determined by

• central planning.
• market forces.
• political forces.
• private investors.

Higher prices generally

• discourage consumers from seeking a substitute.
• discourage producers from entering a market.
• motivate consumers to buy.
• motivate producers to enter a market.

The maximum amount that sellers may charge for a good or service is called a

• maximum wage.
• minimum wage.
• price ceiling.
• price floor.

When producers supply more, equilibrium price will

• fall.
• fluctuate.
• rise.
• stay the same.

A surplus happens when

• prices are too low relative to consumer demand.
• prices are too high relative to consumer demand.
• prices are too low relative to producer demand
• prices are too high relative to producer demand.

If the government set a limit on the cost of baseball bats, this action would be called

• setting an equilibrium price.
• setting a minimum price.
• setting a price ceiling.
• setting a price floor.

Which of the following is an example of a price floor?

• limiting the ticket prices.
• setting a minimum wage.
• rationing tires.
• establishing rent controls.