Market Equilibrium Quiz

Market equilibrium is achieved when

• The number of buyers is equal to the number of sellers.

• The quantity demanded is equal to the quantity supplied.

• The price is equal to the quantity.

• The quantity demand is equal to the number of buyers.

If government sets a price ceiling below an equilibrium price,

• there will be a shortage.

• demand will be less than supply.

• quantity demanded will equal quantity supplied.

• there will be a surplus.

If government sets a price floor below an equilibrium price,

• the floor will be ineffective.

• there will be a surplus.

• there will be a shortage.

• quantity demanded will equal quantity supplied.

If commodity X and commodity Y are substitutes for goods, an increase in the price of goods X will cause the

• demand curve for goods X to shift to the left

• demand curve for goods X to shift to the right

• demand curve for goods Y to shift to the right

• demand curve for goods Y to shift to the left

Assume the market equilibrium price of rice is $5.00 per pound. If the government does not allow rice farmers to charge more than $1.00 per pound of rice,

• quantity demanded will equal quantity supplied.

• there will be a rice shortage.

• there will be a rice surplus.

• the market equilibrium price will move from $5.00 to $1.00.

Suppose that the number of buyers in a market increases and a technological advancement occurs also. What would we expect to happen in the market?

• The equilibrium price would increase, but the impact on the amount sold in the market would be constant.

• The equilibrium price would decrease, but the impact on the amount sold in the market would be indeterminate.

• Both equilibrium price and equilibrium quantity would increase.

• Equilibrium quantity would increase, but the impact on equilibrium price would be constant.

Refer to Graph 4-5. According to the graph, equilibrium price and quantity are

• $7, 20.

• $7, 60.

• $5, 40.

• $3, 60.

Refer to Graph 4-5. According to the graph, at a price of $7,

• there would be a shortage of 40 units.

• there would be a surplus of 40 units.

• there would be a surplus of 20 units.

• the market would be in equilibrium.

When market reaches equilibrium, change in demand or supply will result in surplus or shortage.

• True

• False

What is the effect on the equilibrium price and quantity of chicken when there are technological advances in the fisheries industry?

• The price of chicken will increase and the equilibrium quantity of chicken will decrease.

• The price of chicken will increase and the equilibrium quantity of chicken will decrease.

• The price of chicken will increase and the equilibrium quantity of chicken will not change.

• The price of chicken will change and the equilibrium quantity of chicken will increase.