WorksheetsEdexcel Economics 1.2.7 Price Determination
Total questions: 12
Worksheet time: 4mins
Equilibrium price is
The price at which there is no tendency to change because planned (or desired or ex ante) purchases (i.e. demand) are equal to planned sales (i.e. supply).
Where demand is greater than supply
Where supply is greater than demand
The price at which there is neither excess demand nor excess supply but where everything offered for sale is purchased
Excess demand is
Where demand is greater than supply.
Where supply is greater than demand.
Where there is a shortage
Where there is a surplus
Excess supply is
Where demand is greater than supply.
Where supply is greater than demand.
Where there is a shortage
Where there is a surplus
Free Market forces are
supply
demand
demand and supply
Disequilibrium price is
The price at which there is no tendency to change because planned (or desired or ex ante) purchases (i.e. demand) are not equal to planned sales (i.e. supply).
Where demand is greater than supply
Where supply is greater than demand
The price at which there is either excess demand or excess supply, where everything offered for sale is not purchased
Factors affecting supply are
Pasific + P
BRITS
SPLATT
PINTSWC + CJS + P
Factors affecting demand are
Pasific + P
BRITS
SPLATT
PINTSWC + CJS + P
Factors affecting PED are
Pasific + P
BRITS
SPLATT
PINTSWC + CJS + P
Factors affecting PES are
Pasific + P
BRITS
SPLATT
PINTSWC + CJS + P
In supply the long run is
the period of time when all factor inputs can be varied but the state of technology remains constant.
the period of time when at least one factor input to the production process can be varied.
In supply the short run is
the period of time when all factor inputs can be varied but the state of technology remains constant.
the period of time when at least one factor input to the production process can be varied.
Which of the following describe the function (the role of) prices in a market?
Incentive function, When changes in price encourage buyers and sellers to change the quantity they buy and sell. A rise in price encourages buyers to purchase less and sellers to produce more; and vice versa.
Rationing function, When changes in price lead to more or less being produced, so increasing or limiting the quantity demanded by buyers.
Signalling function, When changes in price give information to buyers and sellers which influence their decisions to buy and sell.
