AnswersVHS-Economics and Personal FinanceDetermining Market Price

Elasticity and Incentives Answers

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The graph shows excess supply.Which needs to happen to the price indicated by p2 on the graph in order to achieve equilibrium?

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I
It needs to be increased.
I
It needs to be decreased.
I
It needs to reach the price ceiling.
I
It needs to remain unchanged.
3

Both excess supply and excess demand are a result of

e
equilibrium.
d
disequilibrium.
o
overproduction.
e
elasticity.
4

The graph shows a point of equilibrium.If the quantity supplied is greater than the quantity demanded, what must happen to the price in order to reach equilibrium?

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T
The price of the product will increase to meet equilibrium.
T
The price of the product will decrease to meet equilibrium.
S
Supply and demand must be raised.
S
Supply and demand must be lowered.
5

The graph shows demand.In order to achieve equilibrium, what else must be included on the graph?

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d
disequilibrium
s
supply curve
e
excess supply
e
excess demand
6

Which explains the connection between the law of demand and excess demand?

A
The law states that decreases in price leads to greater quantity demanded and limited supply, which occurs during excess demand.
B
The law states that increases in price increases leads to greater quantity demanded and limited supply, which occurs during excess demand.
C
The law states that decreases in price leads to greater supply and equilibrium, which occurs during excess demand.
D
The law states that increases in price leads to greater supply and equilibrium, which occurs during excess demand.
7

Supply and demand coordinate to determine prices by working

A
together.
B
competitively.
C
with other factors.
D
separately.
8

What happens when the quantity of a good supplied at a given price is greater than the quantity demanded?

e
excess supply
s
stable prices
e
exact equilibrium
i
increased production
9

Which occurs during market equilibrium? Select two options.Supply and demand meet at a specific price.Supply is slightly greater than demand.Supply and demand meet at a specific quantity.Supply and demand meet at a demand point.Supply and demand meet at a supply point.

A
Supply and demand meet at a specific price.
B
Supply is slightly greater than demand.
C
Supply and demand meet at a specific quantity.
D
Supply and demand meet at a demand point.
E
Supply and demand meet at a supply point.
10

On a graph, an equilibrium point is where

A
a supply curve and a demand curve meet.
B
a supply curve is higher than a demand curve.
C
the supply and demand curves head up.
D
the supply and demand curves head down.

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