In economics, what does the term 'market equilibrium' refer to?
The point where demand exceeds supply
The point where supply exceeds demand
The point where supply equals demand
The point where prices are fixed
#2
Which of the following is a characteristic of economic efficiency?
Maximizing production costs
Minimizing production costs
Maximizing waste
Maximizing prices
#3
Which of the following is a measure of economic efficiency?
GDP per capita
Unemployment rate
Inflation rate
Marginal utility
#4
What is the primary goal of a market economy?
Equitable distribution of wealth
Government control over production
Maximizing profits for firms
Allocation of resources based on supply and demand
#5
What happens if there is a surplus in a market?
Prices will rise
Prices will fall
Supply will decrease
Demand will increase
#6
Which of the following is NOT a condition for market equilibrium?
Equal supply and demand
Lack of external interference
Fixed prices
Competitive market
#7
What is the formula for calculating price elasticity of demand?
Percentage change in quantity demanded / Percentage change in price
Percentage change in price / Percentage change in quantity demanded
Total quantity demanded / Total price
Total price / Total quantity demanded
#8
What is the effect of a price ceiling in a market?
It creates a surplus
It creates a shortage
It increases consumer surplus
It decreases producer surplus
#9
What concept describes the situation where the cost of producing one more unit of a good or service equals the benefit gained from consuming that additional unit?
Marginal cost
Average cost
Total cost
Fixed cost
#10
Which of the following is a characteristic of a perfectly competitive market?
A large number of buyers and sellers
Product differentiation
Barriers to entry
Price setting by individual firms
#11
What is deadweight loss?
The loss in total surplus that occurs when a market is not in equilibrium
The loss in consumer surplus that occurs when a market is in equilibrium
The loss in producer surplus that occurs when a market is in equilibrium
The loss in government revenue that occurs when a market is in equilibrium