WorksheetsMarket Equilibrium
Total questions: 10
Worksheet time: 5mins
Markets can only reach an equilibrium in free-market conditions
True
False
Which of the following is not a function of prices in the market?
Signaling information
Influencing demand
Rationing scarce resources
Giving incentives to consumers and producers
Allocative efficiency is reached when
Prices are low
Prices are high
There is a full employment level of output
The market is in equilibrium
Community surplus is calculated by
Adding up producer and consumer surplus
Dividing consumer surplus by producer surplus
Dividing consumer surplus by inflation rate
Multiplying consumer surplus by 2
Social efficiency and allocative efficiency are the same thing
True
False
What happens to the equilibrium when there is an increase in the income of consumers?
Shift to the right
Shift to the left
What are the functions of the price mechanism?
To signal information to consumers and producers
To ration scarce resources
To decrease inflation
To shift the equilibrium
What is the situation at price Pe?
Excess supply
Excess demand
Fall in price
Increased quantity
What does it mean that equilibrium is “self - righting”?
When moved without disturbance - it will return to its original position
When moved it will remain in a fixed position
When moved to the left it shifts right
It moves to the right
What is represented by the letter A?
Producer surplus
Government surplus
Consumer surplus
