Market Equilibrium Quiz

What is the equilibrium price?

• $40 a barrel

• $30 a barrel

• $15 a barrel

• $50 a barrel

What happens when there is a surplus in the market?

• Sellers lower their price to outcompete others

• Buyers compete to buy more by bidding up the price

• Buyers can't get as much of the good as they want

• The price continues to rise

At what price does a shortage occur?

• $15 a barrel

• $50 a barrel

• $40 a barrel

• $30 a barrel

What is the main concept behind the equilibrium price?

• Buyers compete against sellers

• Sellers compete against buyers

• Forces push the price towards equilibrium

• Price stability is not important

What happens when the quantity exchanged is greater than the equilibrium quantity?

• No unexploited gains from trade

• Buyers and sellers maximize gains from trade

• Drilling deep and expensive oil wells for rubber duckies

• Wasteful trades occur

Who competes against other buyers in a market?

• Sellers

• Other buyers

• Auctioneers

• Non-buyers

What is the role of sellers in a market with a shortage?

• Sell more than they want

• Raise the price to meet demand

• Lower their prices to outcompete others

• Compete against buyers

What is the main goal of buyers and sellers in a free market?

• Avoid equilibrium price

• Create unexploited gains from trade

• Minimize the quantity exchanged

• Maximize their own self-interest

What is the outcome of buyers bidding up the price in a shortage?

• Price continues to fall

• Equilibrium is reached

• Price continues to rise

• Sellers lower their prices