Supply, Demand, & Price

Question 1

as buyers and sellers interact, the market moves toward ______

Answer 1

market equilibrium

Question 2

______ is the price at which quantity demanded and the quantity supplied are equal

Answer 2

market equilibrium

Question 3

______ is the result of quantity supplied being greater than quantity demanded (above equilibrium)

Answer 3

surplus

Question 4

______ is the result of quantity demanded being higher than quantity supplied (below equilibrium)

Answer 4

shortage

Question 5

a decrease or increase in demand causes a ______ relationship with the change of equilibrium

Answer 5

direct

Question 6

a decrease or increase in supply causes an ______ relationship with the change of equilibrium

Answer 6

inverse

Question 7

______ is the legal maximum price that sellers may charge for a product

Answer 7

price ceiling

Question 8

______ is a legal minimum price that buyers must pay for a product

Answer 8

price floor

Question 9

______ is a legal minimum amount that an employer must pay for one hour of work

Answer 9

minimum wage

Question 10

______ is a system in which the government allocates goods and services using factors other than price

Answer 10

rationing

Question 11

______ involves illegal buying or selling in violation of price controls or rationing

Answer 11

black market

Question 12

A binding price ceiling occurs ______ equilibrium

Answer 12

below

Question 13

A binding price floor occurs ______ equilibrium

Answer 13

above

Question 14

______ occurs when producers sell goods and services at prices that best balance the twin desires of making the highest profit and luring consumers away from rival producers

Answer 14

competitive pricing

Question 15

four characteristics of the price system

Answer 15

neutral, market driven, flexible, efficient

Question 16

an ______ encourages people to act in certain ways

Answer 16

incentive

Question 17

for producers, the price system has two great advantages

Answer 17

information and motivation

Question 18

______ act as signals and incentives to consumers

Answer 18

prices

Question 19

______ rely on the consumer perception that a certain logo is worth a higher price

Answer 19

brand marketers