Price and Equilibrium - Review

What determines the price and quantity produced of most goods?

• The consumer's perception of necessity
• The interaction of supply and demand
• the availability of substitutes of the goods
• The quality of the goods produced

When buyers purchase exactly as much as sellers are willing to sell, what is reached?

• Supply and Demand
• Excess Demand
• Equilibrium
• Price Floor

What happens when the supply of a non perishable good is greater than the demand?

• The good is discarded
• The good becomes a luxury and price rises
• Either the good remains unsold or the price drops
• Either the good is saved for later sale or the price goes up

What is it called when the government uses some tool other than money to allocate resources?

• Supply management
• Rationing
• Disequilibrium
• Resource Allocation

A shortage will develop when ____.

• The quantity supplied of a good is greater than the quantity demanded
• The Equilibrium quantity supplied is lower than actual quantity supplied
• The government provides subsidies to producers
• The market price is below the equilibrium price

Why did the U.S. government use the rationing of some foods and consumer goods during WWII?

• To guarantee each civilian a minimum standard of living
• to keep sellers from raising prices on necessary goods
• because the English government had also decided on rationing
• to earn money to support the military

Why do fads often lead to shortages, at least in the short term?

• Buyers and sellers are unable to agree on a price
• laws prevent stores from responding in time to prevent it
• manufacturers charge higher prices than stores can pay
• demand goes up so fast - time is needed for Quantity Supplied and Price to adjust

What is meant by the term disequilibrium?

• when quantity supplied and quantity demanded are not the same
• a sudden lack of goods
• smallest amount that can be paid to a worker
• when quantity supplied and quantity demanded are equal

A designer raises the price of jeans by 50%. This will likely lead to a:

• Shortage

• Surplus

A limited quantity of popular dolls are released right before Christmas. This will likely lead to a:

• Shortage

• Surplus