Ch. 6 Econ Review

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 vertical axis shows

• demand.
• equilibrium.
• prices.
• quantity.

On the demand and supply graph, the horizontal axis shows

• demand.
• equilibrium.
• prices.
• quantity.

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.

Suppliers often reduce prices in an because they

• have a shortage of products to sell.
• have a surplus of products to sell.
• want to decrease consumer demand.
• want to increase the product supply.

A state of disequilibrium happens when an imbalance exists between

• quality supplied and quality demanded.
• quality supplied and quantity demanded.
• quantity supplied and quality demanded.
• quantity supplied and quantity demanded.

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.

Lower prices generally

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