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REVIEW
Chapter 6
Equilibrium is NOT…
A. a point where a good has instability
B. a point of balance between price and
quantity
C. a point on a graph were supply and
demand intersect
D. all the above
Initially a fad can cause…
A.
B.
C.
D.
excess supply
excess demand
surplus
equilibrium in the market
A govt. imposed price ceiling is
usually imposed on what type of
good?
A. those that are good for all people to
have
B. goods the govt. actually needs for
themselves
C. essential goods that may be too
expensive for some consumers
D. all the above
Disequilibrium is NOT…
A. a point where a good has stability
B. a point of imbalance between price
and quantity
C. a point of excess demand on a graph
D. a point of shortage on a graph
Why do controlled economies
(i.e. Communist) want to control
pricing?
A.
B.
C.
D.
to increase competition
to keep the markets free
to create equality
to create equilibrium
What does govt. use other than
price control to allocate goods?
A.
B.
C.
D.
goods allocation
rationing
price restraints
surplus management
P
r
i
c
e
Quantity
A. the star is pointing out equilibrium
B. the star is pointing out excess
demand
C. the star is pointing out excess supply
D. the star is pointing out shortage
Which of these is NOT true
concerning “price ceilings”?
A. Also called “price control”
B. Can cause a shortage in the market
C. Used by the government to set a
maximum price for a good or service
D. Can cause excess supply in the
market
A govt. imposed price floor is
usually imposed on what type of
good?
A.
B.
C.
D.
only expensive goods
rare goods that are hard to find
goods the govt. wants for themselves
those goods that will allow the
supplier to make a better profit
P
r
i
c
e
Quantity
A. the star is pointing out equilibrium
B. the star is pointing out excess
demand
C. the star is pointing out excess supply
D. the star is pointing out surplus
P
r
i
c
e
Quantity
A. the graph shows an increase shift in
demand
B. the graph shows a decrease shift in
demand
C. the graph shows an increase shift in supply
D. the graph shows a decrease shift in supply
P
r
i
c
e
Quantity
A. the star is pointing out equilibrium
B. the star is pointing out excess
demand
C. the star is pointing out excess supply
D. the star is pointing out shortage and
surplus
What is the term for the financial
and opportunity cost associated
with finding a good in shortage?
A.
B.
C.
D.
shortage costs
supply cost
search costs
spillover costs
P
r
i
c
e
Quantity
A. the graph shows an increase shift in
demand
B. the graph shows a decrease shift in
demand
C. the graph shows an increase shift in supply
D. the graph shows a decrease shift in supply
Which of these is NOT true
concerning “price floors”?
A. Also called “price support”
B. Can cause a surplus in the market
C. Used by the government to set a
minimum price for a good or service
D. Can cause excess demand in the
market
Which of these is NOT a true
statement?
A. To reduce a surplus, a supplier will
reduce the price
B. A shift in either supply or demand will
cause a shift in equilibrium also
C. To reduce a shortage, a supplier will
reduce the price
D. None of the above
A.
B.
C.
D.
Equilibrium is $12 P and 2,000 Q
Equilibrium is $6 P and 2,000 Q
Equilibrium is $9 P and 3,000 Q
Equilibrium is $3 P and 1,000 Q
A.
B.
C.
D.
At $15 the excess supply is 1000
At $15 the excess supply is 5000
At $15 the excess supply is 4000
At $15 the excess supply is 2000