Market Equilibrium Quiz

What is market equilibrium?

• The point at which quantity demanded exceeds quantity supplied

• The point at which price is determined by the government

• The point at which quantity supplied exceeds quantity demanded

• The point at which quantity demanded equals quantity supplied

Define excess demand.

• A situation in which the quantity supplied exceeds the quantity demanded at a given price.

• A situation in which the quantity demanded is equal to the quantity supplied at a given price.

• A situation in which there is no demand for a product at any price.

• A situation in which the quantity demanded exceeds the quantity supplied at a given price.

Explain excess supply.

• Excess supply

• Shortage of demand

• Equilibrium

• Perfect competition

What is producer surplus?

• The difference between the price at which producers are willing to sell a good and the actual price they pay.

• The difference between the price at which producers are willing to sell a good and the actual price consumers pay.

• The difference between the price at which producers are willing to sell a good and the actual price they receive.

• The difference between the price at which producers are willing to sell a good and the actual cost of production.

Define consumer surplus.

• The difference between the actual price a consumer pays and the maximum price they are willing to pay.

• The difference between the minimum price a consumer is willing to pay and the actual price they pay.

• The difference between the maximum price a consumer is willing to pay and the actual price they pay.

• The difference between the maximum price a consumer is willing to pay and the minimum price they are offered.

What happens to price and quantity when there is excess demand?

• Price increases and quantity demanded exceeds quantity supplied.

• Price increases and quantity supplied exceeds quantity demanded.

• Price remains the same and quantity demanded exceeds quantity supplied.

• Price decreases and quantity demanded exceeds quantity supplied.

What happens to price and quantity when there is excess supply?

• The price increases and the quantity decreases.

• The price increases and the quantity increases.

• The price decreases and the quantity increases.

• The price decreases and the quantity decreases.

How is producer surplus calculated?

• By adding the cost of production to the price at which the good is sold.

• By subtracting the cost of production from the price at which the good is sold.

• By multiplying the cost of production by the price at which the good is sold.

• By dividing the cost of production by the price at which the good is sold.

How is consumer surplus calculated?

• By finding the sum of the maximum price a consumer is willing to pay for a good and the actual price they pay.

• By finding the difference between the maximum price a consumer is willing to pay for a good and the actual price they pay.

• By finding the average price a consumer is willing to pay for a good and the actual price they pay.

• By finding the difference between the minimum price a consumer is willing to pay for a good and the actual price they pay.

What factors can cause a shift in market equilibrium?

• Changes in weather conditions, changes in population, changes in currency exchange rates

• Changes in advertising strategies, changes in market competition, changes in consumer income

• Changes in product quality, changes in transportation costs, changes in business taxes

• Changes in demand, changes in supply, changes in production costs, changes in government policies, changes in technology, and changes in consumer preferences.