Chp 3 Market Equilibrium

Question 1

Demand Increases, Supply Increases.
What happens to the Equilibrium Price and Equilibrium Quantity?

Answer 1

Equilibrium price is INDETERMINATE.
Equilibrium quantity INCREASES.

Question 2

Demand Decreases, Supply Decreases.
What happens to the Equilibrium Price and Equilibrium Quantity?

Answer 2

Equilibrium price is INDETERMINATE.
Equilibrium quantity DECREASES.

Question 3

Demand Increases, Supply Decreases.
What happens to the Equilibrium Price and Equilibrium Quantity?

Answer 3

Equilibrium price INCREASES.
Equilibrium quantity INDETERMINATE.

Question 4

Demand Decreases, Supply Increases.
What happens to the Equilibrium Price and Equilibrium Quantity?

Answer 4

Equilibrium price DECREASES.
Equilibrium quantity INDETERMINATE.

Question 5

Price Floor causes ______

Answer 5

Surplus

Question 6

Price Ceiling causes ______

Answer 6

Shortage

Question 7

is price ABOVE equilibrium price?
Qd > Qs

Answer 7

False

Question 8

is price BELOW equilibrium price?
Qd > Qs

Answer 8

True