Final Assessment: Market Equilibrium

What occurs when quantity demanded is more than quantity supplied?

• Shortage

• Surplus

• Equilibrium

• Disequilibrium

What is the result of a price increase during a shortage?

• Lower demand

• Higher demand

• Constant demand

• No change in demand

What happens to the market when prices increase and demand lowers?

• It reaches an equilibrium point

• It moves further from equilibrium

• It remains in disequilibrium

• It collapses

What happens when the quantity supplied is more than the quantity demanded?

• Prices will rise.

• Prices will fall.

• Demand will increase.

• Supply will decrease.

What is an example of a price floor?

• Rent control

• Price ceiling

• Minimum wage

• Tax subsidy

What is equilibrium in a market?

• When supply exceeds demand

• When demand exceeds supply

• When quantity demanded equals quantity supplied

• When prices are fixed

What can price controls such as rent control lead to?

• Balanced market

• Excess supply or demand

• Increased competition

• Decreased production

Analyze Political Cartoons: How would you describe the relationship between supply and demand shown here?

• Supply and demand are in conflict.

• Supply and demand are balanced.

• Supply is greater than demand.

• Demand is greater than supply.

What happens when the price of a slice of pizza is $6.00?

• Equilibrium

• Surplus from excess supply

• Shortage from excess demand

• No change

What happens when there is an increase in supply in a market?

• Prices increase

• Prices decrease

• Demand decreases

• Demand increases