Economics 4 Assessment

What is relative price?

• The actual dollar amount of a good

• The opportunity cost of one good in terms of another

• The government-regulated price of goods

• The price difference between two stores

When supply equals demand at a specific price point, this is called:

• Market surplus

• Price ceiling

• Market equilibrium

• Price floor

A shortage occurs when:

• Supply exceeds demand

• Prices are too high

• Demand exceeds supply

• The market is in equilibrium

Which factor does NOT influence market outcomes?

• Available resources

• Government policies

• Weather conditions

• Consumer's favorite colors

What typically happens to price when there is a surplus?

• Prices tend to rise

• Prices remain constant

• Prices tend to fall

• Prices become regulated

A price floor is:

• A maximum legal price

• A minimum legal price

• The equilibrium price

• The market clearing price

Exchange rates represent:

• The price of one currency in terms of another

• The total amount of money in circulation

• The interest rate set by banks

• The inflation rate of a country

If demand increases while supply remains constant, what happens?

• Price and quantity decrease

• Price decreases and quantity increases

• Price and quantity increase

• Price increases and quantity remains constant

Market clearing price is important because it:

• Maximizes government revenue

• Eliminates shortages and surpluses

• Guarantees maximum profits

• Ensures lowest possible prices

Which is a potential result of a price ceiling?

• Excess supply

• Higher prices

• Persistent shortage

• Market equilibrium