ECO (4.3B) Pricing Pt 2 Quiz

1. A situation where quantity supplied is greater than quantity demanded at a given price is called a what?

• equilibrium
• shortage
• surplus
• stock

2. A situation where quantity supplied is less than quantity demanded at a given price is called a what?

• equilibrium
• shortage
• surplus
• stock

3. True or False. Our government sometimes involves itself in our economy by fixing prices for certain products below or above the equilibrium price.

• True
• False

4. True or False. Prices can change because of changes in supply or changes in demand, but NOT because of changes in supply AND demand.

• True
• False

5. The maximum legal price that can be charged for a product is called a what?

• equilibrium price
• market clearing price
• price floor
• price ceiling

6. The lowest legal price that can be charged for a product is called a what?

• equilibrium price
• market clearing price
• price floor
• price ceiling

7. ____ is caused when prices are too high.

• An equilibrium
• A shortage
• A surplus
• A stock

8. ____ is caused when prices are too low.

• An equilibrium
• A shortage
• A surplus
• A stock

9. In order for a price ceiling to be effective, the government must set this price ____ the equilibrium price of the product.

• above
• below
• equal to

10. In order for a price floor to be effective, the government must set this price ____ the equilibrium price of the product.

• above
• below
• equal to