Supply and demand review

What is a price ceiling?

• A minimum price set by the government

• A maximum price set by the government

• The equilibrium price in a market

• A price that causes a surplus

What is the primary effect of a price ceiling set below the equilibrium price?

• Surplus

• Shortage

• No effect

• Increase in supply

Which of the following can cause a shift in the supply curve to the right?

• An increase in production costs

• A decrease in the number of suppliers

• Technological advancements

• An increase in taxes on production

What happens to the equilibrium price when there is a rightward shift in the demand curve?

• It decreases

• It remains the same

• It increases

• It becomes zero

Which of the following is an example of a price floor?

• Rent control

• Minimum wage

• Price ceiling on essential goods

• Equilibrium price

What is the law of supply?

• As price increases, quantity supplied decreases

• As price decreases, quantity supplied increases

• As price increases, quantity supplied increases

• Supply is independent of price

What is the law of demand?

• As price increases, quantity demanded increases

• As price decreases, quantity demanded decreases

• As price increases, quantity demanded decreases

• Demand is independent of price

What is the result of a leftward shift in the supply curve?

• Increase in equilibrium quantity

• Decrease in equilibrium price

• Increase in equilibrium price

• No change in equilibrium price

What is the result of a leftward shift in the demand curve?

• Increase in equilibrium price

• Decrease in equilibrium price

• Increase in equilibrium quantity

• No change in equilibrium quantity

What is equilibrium quantity?

• The quantity where supply exceeds demand

• The quantity where demand exceeds supply

• The quantity where supply equals demand

• The quantity set by the government