Econ Chapter 6

What is equilibrium?

• The price where quantity demanded = quantity supplied

• The price where quantity demanded is more than quantity supplied

• The price where quantity demanded is less than quantity supplied

Look at the supply and demand schedules for the same product

Supply and Demand Schedule

Price of a slice of pizza Quantity Demanded Quantity Supplied

$.50 300 100

$1.00 250 150

$1.50 200 200

$2.00 150 250

$2.50 100 300

$3.00 50 350

At which price does quantity demanded = quantity supplied?

• $1.50

• $0.50

• $3.00

• $2.50

What can be said about the equilibrium price?

• At the equilibrium price, buyers are willing and able to purchase the quantity of a good or service that sellers are willing to sell

• At the equilibrium price, buyers are not able to purchase the quantity of a good or service that sellers are willing to sell

• At the equilibrium price, buyers are unwilling purchase the quantity of a good or service that sellers are willing to sell

What is disequilibrium?

• When price is at a point where quantity supplied is not equal to quantity demanded

• When price is at a point where quantity supplied is equal to quantity demanded

True or false: supply and demand start at equilibrium

• true

• false

How are prices determined?

• supply and demand

• how many workers there are

• what the CEO thinks

• the cost of supplies

When does a surplus happen?

• When quantity supplied is > quantity demanded

• When quantity supplied is < quantity demanded

• When consumers are willing to pay a lot of money for something

• When there are not enough resources to make the goods

When is there a shortage of something?

• When quantity demanded > quantity supplied

• When quantity demanded < quantity supplied

• When there are more resources to make a product than is necessary

• When no one wants the product

What is a price ceiling?

• maximum price that can be legally charged for a good or service

• the maximum price that a consumer is willing to pay for a good or service

• minimum price that can be legally charged for a good or service

• the minimum price that a consumer is willing to pay for a good or service

What is a price floor?

• maximum price that can be legally charged for a good or service

• the maximum price that a consumer is willing to pay for a good or service

• minimum price that can be legally charged for a good or service

• the minimum price that a consumer is willing to pay for a good or service