Test 5

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

Equilibrium price

Question 3

is the result of quantity supplied being greater than quantity demanded

Answer 3

Surplus

Question 4

is the result of quantity demanded being greater than quantity supplied

Answer 4

Shortage

Question 5

When there is a _____, producers lower prices in an attempt to balance quantity supplied and quantity demanded

Answer 5

surplus

Question 6

When there is a ________, producers raise the price in an attempt to balance quantity supplied and quantity demanded

Answer 6

shortage

Question 7

Six factors that can cause a change in demand:

Answer 7

income, market size, consumer tastes, consumer expectations, substitute goods, and complementary goods.

Question 8

Six factors that can cause a change in supply:

Answer 8

Input costs, labor productivity, technology, government actions, producer expectations, and number of producers

Question 9

Decrease or increase in demand will have a ______ with the change of equilibrium

Answer 9

direct relationship

Question 10

Decrease or increase in supply will have an _____ with the change of equilibrium

Answer 10

inverse relationship

Question 11

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

Answer 11

price ceiling

Question 12

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

Answer 12

price floor

Question 13

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

Answer 13

minimum wage

Question 14

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

Answer 14

Rationing

Question 15

A _____ involves illegal buying or selling in violation of price controls or rationing

Answer 15

black market

Question 16

A______occurs below equilibrium

Answer 16

binding price ceiling

Question 17

A _____ occurs above equilibrium

Answer 17

binding price floor

Question 18

_______occurs when producers sell goods and services at price that best balance the twin desires of making the highest profit and luring consumers away from rival produces.

Answer 18

Competitive pricing

Question 19

Four characteristics of the Price System:

Answer 19

1. It is neutral.
2. It is market driven.
3. It is flexible.
4. It is efficient.

Question 20

An ______encourages people to act in certain ways.

Answer 20

incentive

Question 21

For producers, the price system has to great advantages:

Answer 21

Information and motivation

Question 22

______act as signals and incentives to consumers.

Answer 22

Prices

Question 23

______rely on the consumer perception that a certain logo is worth a higher price.

Answer 23

Brand marketers