Market Equilibrium

1. A local farmer’s market is selling tomatoes at ₱50 per kilo. However, many sellers are unable to sell all their tomatoes by the end of the day. What does this indicate?

•  A. The market is in equilibrium

•  B. The price is above the equilibrium price, causing a surplus.

•  C. The price is above equilibrium, causing a shortage.

•  D. There are other substitute goods in the market with much higher prices.

2. A new milk tea shop opens in town and becomes extremely popular, leading to long lines and sold-out supplies every day. What could be happening in the market?

• A. Quantity demanded is greater than quantity supplied, creating a shortage.

•  B. Quantity supplied is greater than quantity demanded, creating a surplus.

•  C. Quantity demanded is equal to quantity supplied, causing a balance in the market.

• D. Market supply is greater than the market demand.

3. Due to a typhoon, vegetable supply in the province drops significantly. If demand remains constant, what will happen to the price and quantity of corn?

•  A. Price will increase, while the quantity supplied stays the same

•  B. Price will stay the same, while the quantity supplied increases

•  C. Price will decrease while quantity supplied will increase

•  D. Price will increase while quantity supplied will decrease

4. A newly released phone model experiences low sales because the price is too high. Which of the following will most likely to occur ?

•  A. a shortage

•  B. a surplus

• C. a market equilibrium

•  D. a low inventory in the product

5. A government-imposed price ceiling on rice is set below the market equilibrium price. What is the most likely outcome?

• A. Consumers will buy less rice

•  B. A surplus will occur

• C. A shortage will occur

•  D. Supply and demand will balance

6. A famous K-drama boosts demand for Korean ramen in local stores. If the supply of the ramen remains the same, what will likely happen to the price of ramen and the quantity sold?

•  A. Price decreases, quantity decreases

•  B. Price increases, quantity increases

•  C. Price remains the same, quantity increases

•  D. Price increases, quantity remains the same

7. After a technology upgrade, a local bakery can produce more bread at the same cost. What happens if demand remains unchanged?

•  A. Supply curve shifts left; prices rise

•  B. Supply curve shifts right; prices fall

•  C. Demand curve shifts right; prices rise

•  D. Quantity supplied decreases

8. A clothing store offers a big discount, selling items below their regular price. Customers rush in and buy most of the stock. What market conditions does this show?

•  A. Market equilibrium

•  B. Surplus

• C. Shortage

•  D. Demand decrease

9. A government sets a minimum price for sugar that is above the equilibrium price to help farmers. What may happen in the sugar market?

• A. An increase in demand for sugar

•  B. A decrease in the price of sugar

• C. A shortage of sugar

• D. A surplus of sugar

10. A town experiences a population boom, increasing the demand for housing. Supply is not able to adjust immediately. What could be the immediate effect on the housing market?

•  A. Equilibrium price drops

• B. Surplus of houses

•  C. Housing price increases

•  D. Demand stays the same