demand and supply/ shortage surplus/ opportunity cost/policy

Surplus is a condition of:

• excess supply

• a deficiency in supply

• market equilibrium

• excess demand

The effect on sales of an increase in price is a decrease in:

• the quantity demanded

• the quantity supplied

In order for quantity supplied to equal 6 units, the price per unit must be:

• $1.

• $2.

• $3.

• $4.

The equilibrium price in this market is equal to:

• $6 per unit.

• $5 per unit.

• $4 per unit.

• $3 per unit.

If the price of this good is $6, then:

• There is an excess demand (a shortage) equal to 210 units.

• There is an excess demand (a shortage) equal to 140 units.

• There is an excess supply (a surplus) equal to 210 units.

• There is an excess supply (a surplus) equal to 140 units.

What does the equilibrium price equal in this market?

• $8.

• $15.

• $30.

• $45.

Customers will be ready to purchase a specified quantity of a product, at a specified price, if marginal utility of further spending is equivalent to the

• cost

• product cost

• revenue

• opportunity cost

Supply and demand are two important factors that influence the market. Supply means the amount of a specific product or service available. Demand refers to the amount of that product or service consumers want to purchase. Both of these factors influence the price of goods. For example, if there is a large supply of a product which few people want to buy, the price of that product will go down. As the price goes down, demand usually increases. Eventually, a balance between the two factors is reached and the optimal price for that product or service is determined. At that point, the supply and demand have reached equilibrium.

Why does demand only “usually” go up when the price is lowered?

• Demand always increases on its own

• The supply is often decreased instead

• Price may not be the only factor causing low demand

• People want to pay more for products, not less

• The system is only based on speculation so nothing is certain

Supply and demand are two important factors that influence the market. Supply means the amount of a specific product or service available. Demand refers to the amount of that product or service consumers want to purchase. Both of these factors influence the price of goods. For example, if there is a large supply of a product which few people want to buy, the price of that product will go down. As the price goes down, demand usually increases. Eventually, a balance between the two factors is reached and the optimal price for that product or service is determined. At that point, the supply and demand have reached equilibrium.

Q. If supply of a product is limited, but demand is high, how would the price be affected?

• It would go up

• It would go down

• It would stay the same

• It would fluctuate

• It would reach equilibrium

6. Supply and demand are two important factors that influence the market. Supply means the amount of a specific product or service available. Demand refers to the amount of that product or service consumers want to purchase. Both of these factors influence the price of goods. For example, if there is a large supply of a product which few people want to buy, the price of that product will go down. As the price goes down, demand usually increases. Eventually, a balance between the two factors is reached and the optimal price for that product or service is determined. At that point, the supply and demand have reached equilibrium.

Q. Based on the passage, what does equilibrium mean?

• Capitalism

• Inflation

• Perfect price

• Final destination

• Balance