Economics Chapter 9 - 10

What is meant by the equilibrium price in the market for a good?

• The average price paid by consumers

• The price at which maximum profit is made

• The price at which the producer breaks even

• The price at which the supply and demand curves intersect

A market is operating with a disequilibrium price. What must this mean?

• Shortages do not exist

• Demand and supply are not equal

• The price mechanism is not working

• There is no opportunity cost involved

Draw an excess demand.

The market for a normal good is in equilibrium at point X. Consumers’ incomes rise and the cost of producing the good rises. In which area of the diagram will the new equilibrium be?

• A

• B

• C

• D

The diagram shows the market for refined oil with equilibrium of X. What will be the new equilibrium when a major oil refinery shuts down for repair work?

• A

• B

• C

• D

During a pandemic, a lot of people are working from home. It forces them to have their own laptops. Draw a demand and supply diagram to show the impact of the pandemic on the price of laptop.