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WorksheetsC3 : SET 3 - MARKET EQUILIBRIUM
Total questions: 10
Worksheet time: 4mins
What is the meaning of ‘Ceiling Price’?
The government imposes a maximum price that prevents certain prices from rising above that price.
The government sets a minimum price that prevents certain prices from falling below that price.
The government provides incentives to the seller or producer to produce more goods.
The government imposes a certain amount to be produced by the seller or producer.
At equilibrium price, ____________________.
quantity supply may exceed quantity DD or vice-versa.
there are no pressures upon price to either rise or fall.
there are forces which tend to cause price to rise.
there are forces which tend to cause price fall.
Price is currently above equilibrium. This will create excess__________. We would expect price to ___________.
demand; increase
demand; decrease
supply; increase
supply; decrease
If there is a surplus of product X, we can predict that
_________________.
fewer resources will be allocated to the production of this good.
the price will rise.
the price will decline.
the supply curve will shift to the left and the demand curve to the right thereby, eliminating the shortage.
The most important characteristic of the equilibrium price is that it ________________.
guarantees that producers earn profit.
ensures the market has no shortage or surplus.
maximizes the quantity demand.
minimizes the quantity demand.
If a product is in shortage, we can conclude that its price _______________.
is below the equilibrium level.
is above the equilibrium level.
will fall in the near future.
is in equilibrium.
An increase in consumers’ income, will _________________.
increase equilibrium quantity and decrease equilibrium price.
increase equilibrium price and decrease equilibrium quantity.
increase in both equilibrium price and quantity.
decrease in both equilibrium price and quantity.
Which of the following statements is incorrect?
If demand increases and supply decreases, equilibrium price will rise.
If supply increases and demand increases, equilibrium price will rise.
If demands decreases and supply increases, equilibrium price will rise.
If supply declines and demand remains constant, equilibrium price will rise.
A price floor placed on a good is a ___________that will normally results in _________.
maximum price ; shortage.
minimum price ; shortage.
maximum price ; surplus.
minimum price ; surplus.
If the ceiling price is fixed below the equilibrium price, we can predict that ____________.
quantity supplied will be less than quantity demanded.
quantity demanded will decrease.
quantity supplied will be greater than quantity demanded.
demand will be less than supply.
