Market Equilibrium & Policy Module

Discipline: Economics

Type of Paper: Question-Answer

Academic Level: Undergrad. (yrs 3-4)

Paper Format: APA

Pages: 1 Words: 275

Question

Economics/Microeconomic Theory

When the market is in equilibrium, the price that consumers pay and that producers receive exactly balances the

marginal benefit and marginal cost of consuming and producing a good or service.


A situation in which the quantity of output demanded is greater than the quantity of output supplied at the current market price is called a

A shortage occurs when:


A shortage occurs when:


the quantity of output demanded is greater than the quantity of output supplied at the current market price.


A situation in which the quantity of output supplied is greater than the quantity of output demanded at the current market price is called _____.

surplus


Shortages and surpluses are represented by the:

horizontal distance between the quantity demanded and the quantity supplied.


Equilibrium means that:

we should expect to see the price and the quantity converge at specific levels.


When the market is in equilibrium, the price that consumers pay and that producers receive:

balances the marginal benefit and marginal cost of consuming and producing a good or service.


Which of the following is true of a normal good?

The quantity demanded falls as the price rises.


A situation in which the quantity of output demanded is greater than the quantity of output supplied at the current market price is called a __________.

shortage or deficit


A surplus occurs when:

quantity demanded < quantity supplied.


In equilibrium:

the quantity supplied equals the quantity demanded.


The nonprice determinants or other factors that affect demand are held constant for any given:

demand curve.


When the _____ of a good changes, the quantity demanded changes.

price or cost


A shortage is sometimes called

excess demand


A surplus occurs when:

supplied is greater than the quantity of output demanded at the current market price.


A nonprice determinant of demand is:

a characteristic of demand for a good, service, or resource other than its own market price.


Shortages and surpluses are represented by the:

horizontal distance between a point on the demand curve at a particular price and a point on the supply curve at the same price.


Non-price determinants are held ____ for any given demand curve. (Use one word for the blank.)

constant

When the price of a good, service, or resource increases:

the quantity supplied increases.


Which of the following is true of a normal good?


The non-price determinants or other factors that affect supply are:

held constant for any given supply curve.


Shortages:

are usually the product of price controls.


When a nonprice determinant of supply changes:

the relationship between the quantity supplied and the price changes.


A characteristic of demand for a good, service, or resource other than its own market price is: a nonprice determinant of demand.


Identify which of the following is an example of a shortage.

No snow shovels are available when a blizzard is forecast.


When a shift of the supply curve occurs:

more or less is supplied at every price.


Which of the following occurs when the price of a good increases?

There is an increase in the quantity supplied.


Non-price determinants are held _____ (one word) for any given supply curve.

constant


A change in a nonprice determinant of supply will:

result in a shift of the supply curve.


The market adjusts to a new equilibrium price and quantity when a non-price ______ of supply changes.

determinant or factor

A nonprice determinant of demand is: