Market Equilibrium & PED

Surplus and Shortages in the market are called

An increase in price causes a

• shifting of the curve

• movement along the curve

• constant in the curve

• stretching of the curve

Answer explanation

Changes to the factor PRICE always causes the curve to move.

An extension of supply is a

• rightward movement

• leftward movement

• rightward shift

• leftward shift

A contraction of supply is a

• rightward shift

• leftward shift

• rightward movement

• leftward movement

A decrease in productivity of workers will result in a

• rightward movement

• leftward shift

• rightward shift

• leftward movement

A market price lower than equilibrium causes

• Excess Supply

• Excess Demand

• Surplus

• Shortage

Draw a surplus in the market (a situation where there is excess supply).

Price Elasticity of Demand (PED) refers to the responsiveness of the quantity demanded to a change in

• taste

• price

• income

• demand

Can a good be elastic?

• Yes

• No

How do you calculate % change?