E.15: Effects of shortages and surpluses

What economic concept describes an imbalance between supply and demand resulting in upward pressure on prices?

• Surplus

• Shortage

• Equilibrium

• Inflation

What can cause a shortage in the market?

• Decrease in demand

• Increase in production

• Government policies that restrict supply

• Increased competition among producers

What can result from a surplus in the market?

• Lower prices

• Increased competition among producers

• Reduced consumer purchasing power

• Higher prices

What effect can shortages have on consumer purchasing power?

• Increase

• Decrease

• Remain unchanged

• No effect

What can lead to a surplus in the market?

• Disruptions in production

• Sudden increases in demand

• Government policies that encourage overproduction

• Price controls

What is a potential consequence of a surplus in the market?

• Increased waste or spoilage of perishable goods

• Rationing of goods

• Lower prices

• Reduced competition among producers

What is crucial for maintaining economic stability and ensuring efficient allocation of resources?

• Price controls

• Government policies that restrict supply

• Understanding and managing shortages and surpluses

• Increased competition among producers

What can governments and businesses use to address shortages and surpluses?

• Equilibrium

• Increased demand

• Subsidies

• Disruptions in production

What is the result of a surplus in the market?

• Upward pressure on prices

• Increased competition among producers

• No effect on prices

• Lower prices

What can lead to a shortage in the market?

• Market regulations

• Sudden increases in demand

• Government policies that encourage overproduction

• Increase in production