Equilibrium

In economics Equilibrium refers to… (be careful, the answer is sneaky)

• The price at which the quantity demanded equals the quantity supplied

• Where price is equal to quantity demanded and quantity supplied

• The price at which the quantity demanded is exactly equal to the quantity supplied and there is no tendency for change

If the price is set above the equilibrium it will lead to…

• Excess Demand

• Excess Supply

• Equilibrium

If the price is set below the equilibrium it will lead to…

• Excess Demand

• Excess Supply

• Equilibrium

What does this diagram represent?

• Excess demand

• Excess Supply

• Equilibrium

What does this diagram represent?

• Excess Demand

• Excess Supply

• Equilibrium

There is pressure on price in this situation to move…

• Upwards

• Downwards

• No there isn’t…fight me!!

In this situation there is pressure on price to move…

• Upwards

• Downwards

• it, move it…ya like to Move it!!

If the government were to lock the price at 70 in this diagram it would be an example of how they create

• A maximum price/a price ceiling

• A price equilibrium

• A minimum wage/minimum product price

If the government were to lock the price at 30 in this diagram it would be an example of how they create

• A maximum price/a rent control

• A price equilibrium

• A minimum wage/minimum product price

Which of these factors could have caused this shift of equilibrium? (Select 3)

• Decrease in the cost of production

• Successful advertising campaign

• Decrease in the price of a complementary good

• Increase in the price of a substitute good

• Price is expected to decrease tomorrow