Economics Quiz: Shortage, Surplus, and Market Equilibrium

What are the causes of surplus in a market?

• Increase in supply and/or increase in demand

• Excess demand and/or increase in supply

• Decrease in supply and/or excess demand

• Excess supply and/or decrease in demand

How does shortage affect the price of a good in the market?

• Shortage causes the price to increase

• Shortage has no effect on the price

• Shortage causes the price to remain the same

• Shortage causes the price to decrease

How does surplus affect the price of a good in the market?

• Surplus causes the price of the good to remain the same.

• Surplus causes the price of the good to decrease.

• Surplus has no effect on the price of the good.

• Surplus causes the price of the good to increase.

What are the factors that can affect market equilibrium?

• Changes in demand, changes in supply, government intervention, and external shocks

• Number of competitors in the market

• Weather conditions in the region

• Changes in price of unrelated goods

How does changes in consumer income affect market equilibrium?

• Changes in consumer income can affect market equilibrium by shifting the demand curve.

• Changes in consumer income cause the market equilibrium to remain constant

• Changes in consumer income only affect the supply curve

• Changes in consumer income have no impact on market equilibrium

What role does government intervention play in market equilibrium?

• Government intervention only leads to higher prices for consumers

• Government intervention always results in a surplus of goods

• Government intervention has no impact on market equilibrium

• Government intervention can affect market equilibrium by implementing policies such as price controls, taxes, subsidies, and regulations.

How do changes in technology impact market equilibrium?

• Advancements in technology can increase production efficiency, leading to an increase in supply and a decrease in price, ultimately affecting market equilibrium.

• Advancements in technology decrease production efficiency, leading to a decrease in supply and an increase in price, ultimately affecting market equilibrium

• Advancements in technology only impact demand, not supply, and price

• Advancements in technology have no impact on market equilibrium

How is price determined in a shortage situation?

• Price is determined by consumer preferences

• Price is determined by government regulations

• Price is determined by the interaction of supply and demand, tending to increase in a shortage situation.

• Price is determined by the cost of production

How is price determined in a surplus situation?

• By government intervention

• By random selection

• By the forces of supply and demand

• By consumer preferences

What happens to price when there is a shortage in the market?

• Price increases

• Price remains the same

• Price decreases

• Price fluctuates