Supply and Demand

What is a surplus?

• A situation in which the quantity of a good or service demanded by consumers exceeds the quantity supplied by producers

• A situation in which the quantity of a good or service supplied by producers exceeds the quantity demanded by consumers

• A situation in which the quantity of a good or service demanded by consumers equals the quantity supplied by producers

• A situation in which the quantity of a good or service demanded by consumers is equal to zero

What is elasticity of demand?

• A measure of how much the quantity demanded of a good or service responds to a change in price

• A measure of how much the quantity supplied of a good or service responds to a change in price

• A measure of how much the quantity demanded of a good or service responds to a change in income

• A measure of how much the quantity supplied of a good or service responds to a change in income

What is elasticity of supply?

• A measure of how much the quantity demanded of a good or service responds to a change in price

• A measure of how much the quantity supplied of a good or service responds to a change in price

• A measure of how much the quantity demanded of a good or service responds to a change in income

• A measure of how much the quantity supplied of a good or service responds to a change in income

What is a price ceiling?

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

• A legal minimum price that must be paid for a good or service

• A situation in which the quantity of a good or service demanded by consumers exceeds the quantity supplied by producers

• A situation in which the quantity of a good or service supplied by producers exceeds the quantity demanded by consumers

What is a price floor?

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

• A legal minimum price that must be paid for a good or service

• A situation in which the quantity of a good or service demanded by consumers exceeds the quantity supplied by producers

• A situation in which the quantity of a good or service supplied by producers exceeds the quantity demanded by consumers

What is the quantity of a good that consumers are willing and able to buy at a given price?

• Quantity demanded

• Quantity supplied

• Price

• Equilibrium price

What is the quantity of a good that producers are willing and able to sell at a given price?

• Quantity demanded

• Quantity supplied

• Price

• Equilibrium price

At equilibrium, what is the relationship between quantity demanded and quantity supplied?

• Equal

• Greater

• Less

• Undefined

If the price of a good increases and the quantity demanded decreases, then the price elasticity of demand is:

• Elastic

• Inelastic

• Unit elastic

• Undefined

Which of the following goods is likely to have a high price elasticity of demand?

• Luxury goods

• Necessities

• Both luxury goods and necessities

• None of the above