AnswersGalliWCA 2221 CivicsEconomics 1st nine weeks 26-27Determining Market Price

2.3 Determining Market Price Answers

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1
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What happens when the quantity of a good supplied at a given price is greater than the quantity demanded?

e
excess supply
s
stable prices
e
exact equilibrium
i
increased production
2
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Which explains the connection between the law of demand and excess demand?

A
The law states that decreases in price leads to greater quantity demanded and limited supply, which occurs during excess demand.
B
The law states that increases in price increases leads to greater quantity demanded and limited supply, which occurs during excess demand.
C
The law states that decreases in price leads to greater supply and equilibrium, which occurs during excess demand.
D
The law states that increases in price leads to greater supply and equilibrium, which occurs during excess demand.
3

The graph shows excess supply.Which explains why the price indicated by p2 on the graph is higher than the equilibrium price?

Question illustration
A
As prices rise, quantity demanded goes up.
B
As prices rise, quantity demanded goes down.
C
As prices rise, quantity demanded stays the same.
D
As prices rise, quantity demanded disappears.
4

Supply and demand coordinate to determine prices by working

A
together.
B
competitively.
C
with other factors.
D
separately.
5

Both excess supply and excess demand are a result of

A
equilibrium.
B
disequilibrium.
C
overproduction.
D
elasticity.
6

A limited amount of goods available means that excess is occurring.

Answer:

demand

7

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8

Which occurs during market equilibrium? Select two options.Supply and demand meet at a specific price.Supply is slightly greater than demand.Supply and demand meet at a specific quantity.Supply and demand meet at a demand point.Supply and demand meet at a supply point.

A
Supply and demand meet at a specific price.
B
Supply is slightly greater than demand.
C
Supply and demand meet at a specific quantity.
D
Supply and demand meet at a demand point.
E
Supply and demand meet at a supply point.
9

The graph shows a point of equilibrium.What does "Q” represent on the graph?

Question illustration
A
the point where equilibrium is achieved
B
the quantity at the equilibrium point
C
the average cost of goods sold
D
the point where supply and demand drop
10

The graph shows a point of equilibrium.If the quantity supplied is greater than the quantity demanded, what must happen to the price in order to reach equilibrium?

Question illustration
A
The price of the product will increase to meet equilibrium.
B
The price of the product will decrease to meet equilibrium.
C
Supply and demand must be raised.
D
Supply and demand must be lowered.
11

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12

The graph shows excess supply.Which needs to happen to the price indicated by p2 on the graph in order to achieve equilibrium?

Question illustration
A
It needs to be increased.
B
It needs to be decreased.
C
It needs to reach the price ceiling.
D
It needs to remain unchanged.
13

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14

The graph shows excess demand.Which needs to happen in order to stop disequilibrium from occurring?

Question illustration
A
Q needs to be coordinated with supply.
B
Q needs to be coordinated with demand.
C
The price of goods needs to be increased.
D
The price of goods needs to be decreased.
15

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16

Equilibrium is defined when

A
supply is limited and demand decreases.
B
supply and demand meet.
C
demand is higher than supply.
D
supply is higher than demand.
17

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18

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19

The graph shows excess demand.Which explains why the price indicated by p2 on the graph is lower than the equilibrium price?

Question illustration
A
As prices fall, quantity demanded goes up.
B
As prices fall, quantity demanded goes down.
C
As prices fall, quantity demanded stays the same.
D
As prices fall, quantity demanded disappears.
20

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