Economics Ch. 6

When the quantity supplied equals the quantity demanded, what has occured?

• prices increase

• equilibrium

• prices decrease

• there is a shortage

Low prices cause buyers to...

• substitute other items

• buy less

• buy more

• postpone buying

What effect does a bumper crop have on the price of that crop?

• no effect

• equilibrium

• decrease

• increase

When did the most rationing occur in the US?

• Hurricane Katrina

• 1970's energy crisis

• WWII

• WWI

What do price floors and ceilings prevent?

• shortages

• surpluses

• prices reaching equilibrium

• benefits to consumers

Who benefits from rent control?

• people who do maintenance and repairs on the building

• owners of rent-controlled apartments

• tenants in rent-controlled apartments

• people with children

What causes price changes most of the time?

• government policy

• changes in supply and demand

• changes in supply only

• changes in demand only

What is the highest legal price that can be charged for a product?

• price ceiling

• price floor

• equilibrium price

• monetary value of a product

Price floor for agricultural products set by the government to stabilize farm prices

• target price

• equilibrium quantity

• rationing

• equilibrium price

How do economists analyze behavior and predict outcomes?

• surplus

• economic model

• equilibrium price

• equilibrium quantity