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WorksheetsPearson ch 3 equilibrium price mechanism
Total questions: 40
Worksheet time: 18mins
On the market demand and supply graph, the point of market equilibrium always happens
at the highest point on the demand curve.
where the demand and supply curves intersect.
at the lowest point of the supply curve.
In the price system of a market economy, prices are determined by
central planning.
market forces of supply and demand
political forces.
Higher prices generally
discourage consumers from seeking a substitute.
discourage producers from entering a market.
motivate producers to enter a market ( incentivise )
When consumers demand more goods and services at every price, equilibrium price will
fall.
fluctuate.
rise.
Equilibrium price is the price at which the quantity of a product demanded by consumers and the quantity supplied by producers
are different.
are equal.
is higher for the product demanded.
Suppliers often reduce prices in a sale because they
have a shortage of products to sell.
have a surplus of products to sell.
want to increase consumer demand.
Allocative efficiency occurs only at that output where...
marginal benefit exceeds marginal cost by the greatest amount
consumer surplus exceeds producer surplus by the greatest amount
the combined amounts of consumer surplus and producer surplus are maximized
In a market economy, the public interest is likely to be served even when individuals pursue their personal economic goals because of .
the operation of competitive markets
the social responsibility of business leaders.
central planning and coordination of market activity.
When there is a shortage of a product in a competitive market, it is usually the case that the
market price of the product will eventually increase.
market price of the product will eventually decrease.
quantity of the product exchanged in the market will eventually decrease.
Point at which supply and demand come together
price ceiling
excess demand
equilibrium
When quantity demanded is more than quantity supplied
price ceiling
excess demand
disequilbrium
When quantity supplied exceeds quantity demanded at a certain price.
shortage
fad
surplus
At which price is equilibrium?
$1.00
$1.25
$1.50
At which quantity does supply and demand reach equilibrium?
500
600
700
If a news article about filthy conditions in a local restaurants alarms customers.
Demand will increase
Demand will decrease
Supply will decrease
allocative efficiency best explains the economic question of
what should be made
how to make
who gets it
in a free market prices act to
ration scarce resources for buyers and sellers
determine the profits of the firms because price - cost is all that matters
ration goods so the rich and government can afford to buy them by outbidding the poor
prices act to ......... goods and services
ration , improve and share
incentivise, signal and ration scarce resources
be an invisible hand and share out
When total surplus is reduced because of either under or overproduction, it is referred to as _______
Marginal cost
Market efficiency
Equilibrium
A deadweight loss
Economic efficiency occurs when ___________
Consumer surplus is greater than producer surplus
Producer surplus is greater than Consumer surplus
Total surplus is maximised
The government levies a tax on the good
What is the best definition of consumer surplus?
The difference between how much buyers are prepared to pay for a good and suppliers are will to sell a good
The difference between how much buyers are prepared to pay for a good and what they actually pay
The marginal utility of consuming a good
The area above the equilibrium price
How much surplus benefit does the second consumer get based on the diagram?
£1
£6
£2
£3
The area shaded in the diagram is referred to as
The total cost of producing 5000 units
The total utility of consuming 5000 units
The consumer surplus
The producer surplus
using the review quizzes before the test - helps me to clarify my knowledge and re read/ review things that I got wrong before the test
true
false
sometimes
it depends
if I knew about it
If the price of gas rises, what happens to its supply? warning - do not get tricked !!!
supply increases
Supply extends
Assume the image is showing the market for apples. Which of the headlines could indicate the pictured shift is occurring in the market?
Pesticides on apples linked to mouth cancer.
Storms destroy apple orchards.
An apple a day really does keep the doctor away.
New genetic strain leads to apple trees that produce twice as many apples.
housing
The general level of incomes rises.
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new environmentally sustainable houses built - save energy and recycle material for the eco friendly market
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housing
better technology makes builders more productive
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housing
shortage of window and doors due to covid transport restrictions
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government give first home owners a $25,000 grant to enter the market
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low interest rates - reach record low levels
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