Supply and Demand Review

Supply and demand determine

• needs and wants.

• all goods produced.

• the price for a good or service.

• All of the above.

Equilibrium is

• when there is a surplus.

• when there is a shortage.

• when there is both a surplus and a shortage.

• when the producer and the consumers agree on a price.

The law of demand says

• producers will supply more when prices decrease.

• producers will supply more when prices increase.

• consumers will buy more when prices increase.

• consumers will buy less when prices increase.

A producer will cause a shortage,

• if the price for a good is set too high.

• if the price for a good is set too low.

• If the price is set at the equilibrium point.

• None of the above.

A price floor is when

• the government sets a maximum price for a good.

• the government sets a minimum price of a good.

• The government allows the market to decide the price for a good.

• All of the above.

On a supply and demand graph, one can find the equilibrium price by locating

• only the demand curve.

• only the supply curve.

• where demand and supply cross.

• the title of the graph.

A producer will cause a surplus,

• if the price of a good is set too high.

• if the price of a good is set too low.

• if price is set at the equilibrium point.

• None of the above.

The law of supply says

• producers will supply more when prices decrease.

• producers will supply more when prices increase.

• consumers will buy more when prices decrease.

• All of the above

Which factors can change (shift) supply or demand?

• Income, tastes, and population

• Taxes and subsidies

• Cost of production and competition

• All of the above.

A price ceiling is when

• the government sets a maximum price for a good.

• the government sets a minimum price of a good.

• The government allows the market to decide the price for a good.

• All of the above.