Economic Equilibrium Quiz

Equilibrium in economics is a state where the quantity of goods and services supplied equals the quantity demanded.

Economic equilibrium does not involve excess demand or supply, as it signifies a balance between the two.

In a competitive market equilibrium, no single buyer or seller has the influence to change the market price.

An increase in both demand and supply leads to a simultaneous increase in equilibrium price and quantity.

In a perfectly competitive market, economic equilibrium is achieved when the price equals the marginal cost of production.

The equilibrium price ensures efficient allocation by balancing the quantity of goods supplied with the quantity demanded.

The price of substitute goods is a determinant affecting both demand and supply, leading to shifts in equilibrium price and quantity.

Static equilibrium in economics refers to a state where there is no tendency for change.

When the price is above the equilibrium, excess supply occurs in the market.

The price mechanism in a competitive market adjusts supply to align with demand, achieving market equilibrium.

Pareto efficiency in economics describes a situation where no party can be made better off without making another worse off.

The Law of Increasing Opportunity Cost states that producing more of a good increases its opportunity cost.

Various factors, including changes in demand, supply, or government interventions, can disrupt market equilibrium.

Producer surplus is the difference between the producer's minimum acceptable price and the actual market price.

Opportunity cost in economics refers to the value of the best alternative forgone when a decision is made.