10 Questions
What determines the demand for a good in a market?
Price, household income, wealth, prices of other goods and services, tastes and preferences, and expectations
When the cost of producing a good changes due to a new technology, what occurs in the supply curve?
The entire curve shifts
Market equilibrium occurs when:
Quantity supplied equals quantity demanded at the current price
What causes a movement along the supply curve for a good?
Change in price of the good itself
If the price of a good decreases and quantity supplied decreases as well, what has occurred?
Movement along the supply curve
Which factor does NOT influence market equilibrium?
Government regulations
What will happen if there is excess demand in a market?
Price will increase until equilibrium is reached
'What is determined by the intersection of supply and demand curves?'
'Equilibrium price'
If there is an increase in production costs for a good, what is likely to happen to its market equilibrium price?
It will decrease
What happens to market equilibrium when both demand and supply decrease?
Equilibrium price remains constant while equilibrium quantity decreases
Test your understanding of the principles of demand, supply, and market equilibrium as outlined in Chapter 3 of the twelfth edition of Principles of Microeconomics. Questions cover topics such as the law of demand and supply, determinants of demand and supply, demand and supply graphs, and how equilibrium price and quantity are determined.
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