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Questions and Answers
Which economic model postulates that in a competitive market, the unit price for a particular good will vary until it settles at a point where the quantity demanded will equal the quantity supplied?
Which economic model postulates that in a competitive market, the unit price for a particular good will vary until it settles at a point where the quantity demanded will equal the quantity supplied?
- Supply and demand (correct)
- Microeconomics
- Aggregate demand
- Macroeconomics
What does a supply schedule show?
What does a supply schedule show?
- The relationship between the price of a good and the quantity supplied by producers (correct)
- The relationship between the price of a good and the quantity demanded by consumers
- The relationship between the price of a good and the quantity produced by manufacturers
- The relationship between the price of a good and the quantity traded in a market
What is the purpose of the aggregate demand-aggregate supply model in macroeconomics?
What is the purpose of the aggregate demand-aggregate supply model in macroeconomics?
- To depict how the quantity of total output and the aggregate price level may be determined in equilibrium (correct)
- To explain the concept of economic equilibrium
- To analyze the relationship between supply and demand in a competitive market
- To determine the price and quantity transacted in a market
In a competitive market, what happens when the quantity demanded at the current price equals the quantity supplied at the current price?
In a competitive market, what happens when the quantity demanded at the current price equals the quantity supplied at the current price?
What is the theoretical basis of modern economics?
What is the theoretical basis of modern economics?
Study Notes
Market Equilibrium
- In a competitive market, the unit price for a particular good will vary until it settles at a point where the quantity demanded equals the quantity supplied.
- This is the fundamental principle of the market equilibrium model.
Supply Schedule
- A supply schedule shows the various quantities of a particular good that producers are willing to supply at different prices.
Aggregate Demand-Aggregate Supply Model
- The aggregate demand-aggregate supply model is used in macroeconomics to analyze the overall performance of an economy.
- The purpose of the model is to determine the equilibrium price level and the equilibrium level of real GDP.
Market Equilibrium Condition
- When the quantity demanded at the current price equals the quantity supplied at the current price, the market is in equilibrium.
- At this point, there is no tendency for the price to change.
Theoretical Basis of Modern Economics
- The theoretical basis of modern economics is the concept of scarcity, which implies that the needs and wants of individuals are unlimited, but the resources available to satisfy them are limited.
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Description
Test your knowledge of supply and demand in microeconomics with this quiz. Explore the concepts of price determination, market competition, and the equilibrium point where quantity demanded equals quantity supplied. Perfect for economics students or anyone interested in understanding the dynamics of market prices.
