#1
What is equilibrium in economics?
A state where demand equals supply
ExplanationDemand equals supply
#2
What happens to prices in a market when demand exceeds supply?
#3
What is the law of demand?
As the price of a good increases, the quantity demanded decreases
ExplanationPrice increase, demand decreases
#4
What is a substitute in economics?
A good that can be used in place of another good
ExplanationAlternative good
#5
What is the law of supply?
As the price of a good increases, the quantity supplied increases
ExplanationPrice increase, supply increases
#6
What is a surplus in economics?
A situation where quantity supplied exceeds quantity demanded
#7
In a competitive market, what happens if there is a surplus of a good?
Producers decrease prices to increase demand
ExplanationProducers decrease prices
#8
What is the price mechanism?
The mechanism by which prices are determined in a market
ExplanationPrice determination mechanism
#9
What is the 'invisible hand' concept in economics?
The idea that market forces guide resources to their most efficient uses
ExplanationMarket forces guide efficiency
#10
What is the effect of an increase in consumer income on demand for normal goods?
Increase in demand
ExplanationIncome increase, demand increases
#11
What is the formula for price elasticity of demand?
Percentage change in quantity demanded divided by percentage change in price
ExplanationDemand change ratio
#12
What is a complement in economics?
A good that is consumed together with another good
ExplanationConsumed together
#13
What is a price ceiling?
A maximum price set by the government
ExplanationGovernment-set maximum price
#14
What is a price floor?
A minimum price set by the government
ExplanationGovernment-set minimum price
#15
What is the role of elasticity in market equilibrium?
It measures the responsiveness of quantity demanded to price changes
ExplanationMeasures demand responsiveness
#16
What does the price elasticity of supply measure?
The responsiveness of quantity supplied to price changes
ExplanationMeasures supply responsiveness
#17
What is the equilibrium quantity?
The quantity demanded equals the quantity supplied
ExplanationDemand equals supply
#18
What is the market equilibrium price?
The price where quantity demanded equals quantity supplied
ExplanationDemand equals supply price