Unit 5- Review Questions- Supply, Demand, Price Equilibrium

Which of the following best refers to the market equilibrium price?

• Surpluses depress the number of goods supplied.

• Shortages and surpluses will have no effect on the market.

• The government will not intervene in the market.

• The quantity demanded is the same as the quantity supplied.

Mr Coyote goes to the ticket booth to buy tickets for a Spurs game. Mr. Coyote is told that the game is sold out and no tickets are available. Which best explains why there are no basketball tickets available?

• The arena forgot to print enough tickets.

• The supply of tickets was greater than the demand.

• The arena charged too much money for each ticket.

• The demand for tickets was greater than the supply.

Which statement expresses a central idea of how the laws of supply and demand work?

• The government sets the prices for goods and services.

• Prices are determined by the interaction of producers and consumers.

• Consumers alone determine the prices for goods and services.

• Technology dictates the prices charged for goods and services.

When companies compete in a market economy, what is usually the result?

• Consumers are able to buy goods for the best available price.
• People pay much higher prices for goods.
• There are frequent shortages of goods on the market.
• Producers refuse to sell some of their products.

Refer to Graph 4-5. According to the graph, what are the equilibrium price and quantity?

• $7, 20.

• $7, 60.

• $5, 40.

• $3, 60.

Refer to Graph 4-5. According to the graph, What occurs at a price of $7?

• there would be a shortage of 40 units.

• there would be a surplus of 40 units.

• there would be a surplus of 20 units.

• the market would be in equilibrium.

Refer to Table 4-2. In the table shown, what would be the result if the price were $8?

• a surplus of 30 units would exist and price would tend to fall.

• a surplus of 60 units would exist and price would tend to rise.

• a surplus of 60 units would exist and price would tend to fall.

• a shortage of 30 units would exist and price would tend to rise.

Why does the government place price ceilings on some "essential" goods?

• to prevent inflation during to reduce supply for these goods
• to keep business people from making large profits
• to keep the goods from becoming too expensive
• to reduce demand for these goods

When quantity supplied exceeds quantity demanded at a certain price.

• shortage
• fad
• search costs
• surplus

When quantity demanded exceeds quantity supplied at a certain cost

• shortage
• fad
• search costs
• surplus