#1
What is market equilibrium?
When demand exceeds supply
When supply exceeds demand
When quantity demanded equals quantity supplied
When quantity supplied exceeds quantity demanded
#2
What happens if the price in a market is above the equilibrium price?
Excess demand
Excess supply
No effect on supply and demand
Market clears
#3
Which of the following best describes a market in equilibrium?
Quantity demanded exceeds quantity supplied
Quantity supplied exceeds quantity demanded
Price is determined by suppliers
Quantity demanded equals quantity supplied
#4
Which of the following is NOT a price control?
Price ceiling
Price floor
Price stabilization
Tariff
#5
What is the primary purpose of a price ceiling?
To maintain a minimum price level
To maintain a maximum price level
To prevent shortages
To encourage production
#6
What is the impact of a price ceiling below the equilibrium price?
Surplus
Shortage
Market equilibrium
No effect
#7
Which of the following is NOT a factor that can shift the demand curve?
Changes in consumer income
Changes in the price of substitutes
Changes in technology
Changes in the price of the product
#8
What is the likely consequence of imposing a price ceiling on rental housing in a city with high demand?
Increased availability of rental units
Decreased rental prices
Shortage of rental units
Stabilization of rental market
#9
Which of the following would cause a rightward shift of the supply curve?
Increase in production costs
Decrease in the price of raw materials
Decrease in taxes on producers
Decrease in consumer income
#10
What happens to market equilibrium price and quantity if both demand and supply increase?
Price increases, quantity increases
Price decreases, quantity increases
Price increases, quantity decreases
Price decreases, quantity decreases
#11
What is the effect of a price floor set above the equilibrium price?
Creates a shortage
Creates a surplus
No effect on the market
Increases equilibrium price
#12
What happens to market equilibrium price and quantity if both demand and supply decrease?
Price increases, quantity decreases
Price decreases, quantity decreases
Price decreases, quantity increases
Price increases, quantity increases
#13
Which of the following is a potential consequence of implementing a price floor below the equilibrium price?
Increased quantity demanded
Reduced consumer surplus
Increased market efficiency
Decreased quantity supplied
#14
If the government imposes a price floor above the equilibrium price, what is the likely result?
Shortage
Surplus
Market equilibrium
No effect
#15
What happens to the market price if there is an increase in both demand and supply?
Rise
Fall
Remains unchanged
Depends on the magnitude of the changes
#16
What is the primary objective of price controls during wartime or emergency situations?
To maintain market equilibrium
To ensure fairness
To prevent hoarding
To stabilize prices
#17
How does a subsidy affect the market equilibrium?
It decreases equilibrium price and quantity
It increases equilibrium price and quantity
It has no effect on equilibrium price but increases quantity
It increases equilibrium price but decreases quantity
#18
In a market with a price ceiling, what might suppliers do to respond to the constraint?
Increase production to meet demand
Reduce production due to lower profitability
Lower prices to meet the ceiling
Exit the market due to losses
#19
What effect does a binding price floor have on market outcomes?
It results in a surplus of the good
It decreases quantity demanded
It increases consumer surplus
It eliminates producer surplus
#20
What can happen in a market if the government imposes a price ceiling below the equilibrium price?
Surplus
Shortage
No effect
Decrease in demand
#21
How does an increase in consumer income affect demand?
Increases demand
Decreases demand
No effect on demand
Increases supply
#22
What is the likely outcome of a subsidy in a market?
Decrease in quantity supplied
Increase in equilibrium price
Increase in quantity demanded
Increase in price and decrease in quantity
#23
What effect does a binding price ceiling have on market outcomes?
It results in a surplus of the good
It decreases quantity demanded
It increases consumer surplus
It creates a shortage of the good
#24
How does a decrease in the price of a complement affect demand?
Increases demand
Decreases demand
No effect on demand
Decreases supply
#25
What is the likely outcome of a price ceiling below the equilibrium price?
Surplus
Shortage
No effect
Decrease in supply