Match the correct economic term with its definition

• Quantity demanded exceeds supply

• Equilibirum

• Quantity demanded equals supply

• Surplus

• Quantity supplied exceeds demand

• Shortage

When there is a ______, firms lower prices to attract more buyers

A __________ occurs when there is more demand for a product than what is available.

The __________ determines the price in a free market economy.

If demand increases while supply remains constant, the equilibrium price will __________.

A leftward shift in the supply curve causes the equilibrium price to __________.

Explain how the price mechanism helps allocate scarce resources efficiently.

A new government tax increases production costs for a good. Explain how this affects supply and equilibrium price.

2. A new fashion trend increases the popularity of sneakers. Illustrate and explain how this affects demand and equilibrium price.

Suppose there is a bad harvest that reduces the supply of wheat. Predict the effects on price and quantity in the market.