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Market Equilibrium quiz #2 Flashcards

Market Equilibrium quiz #2
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  • What occurs when demand exceeds supply?
    A shortage occurs when demand exceeds supply.
  • At equilibrium quantity, what is true?
    At equilibrium quantity, quantity supplied equals quantity demanded.
  • What type of real estate market occurs when both supply and demand are low?
    A stagnant or slow market occurs when both supply and demand are low.
  • At which price point will Barry’s have the most revenue?
    Barry’s will have the most revenue at the price where total revenue (price × quantity sold) is maximized, often near equilibrium.
  • When a competitive market is in equilibrium, what is true?
    In equilibrium, there is no surplus or shortage; quantity supplied equals quantity demanded.
  • Which ability or function of a company most strongly suggests it may hold monopoly power?
    The ability to set prices above competitive levels suggests monopoly power.
  • What is market equilibrium?
    Market equilibrium is the point where quantity supplied equals quantity demanded.
  • Which of the following describes a short-run equilibrium that is not also a long-run equilibrium?
    A short-run equilibrium may exist when firms earn profits or losses, but in the long run, entry or exit restores zero economic profit.
  • What is the source of demand for loanable funds in a large open economy?
    The demand for loanable funds comes from borrowers seeking funds for investment.
  • Which of these situations best illustrates market equilibrium?
    A situation where quantity supplied equals quantity demanded and there is no pressure for price change.
  • The market price of common stock will be influenced by which of the following?
    The market price is influenced by supply and demand for the stock.
  • At which price point will Rocco’s have the most revenue?
    Rocco’s will have the most revenue at the price where total revenue is maximized, usually near equilibrium.
  • How would market equilibrium change if suddenly people lost interest in a product?
    Demand would decrease, leading to a lower equilibrium price and quantity.
  • In what type of market could a buyer’s strategy be to ask the seller to pay closing costs?
    In a buyer’s market, where supply exceeds demand, buyers have more negotiating power.
  • All retailers strive for supply to be _______ to demand.
    Equal
  • In a purely competitive market, price per unit to a buyer equals:
    The market equilibrium price.
  • What is the situation where quantity supplied is less than quantity demanded at a given price called?
    A shortage.
  • A market in which savers determine the supply of loanable funds is called:
    The loanable funds market.
  • If the market for corn is in equilibrium, what does this mean?
    Quantity supplied equals quantity demanded for corn.
  • A market segment that is large enough or profitable enough to serve is ________.
    A target market.
  • The point where supply and demand meet and prices are set is called:
    Market equilibrium.
  • Market saturation results from excess _______.
    Supply.
  • Equilibrium occurs when supply and demand coordinate to:
    Set the market price and quantity.
  • Whenever there is a shortage at a particular price, the quantity sold at that price will equal:
    The quantity supplied.
  • On a graph, an equilibrium point is where:
    The supply and demand curves intersect.
  • Disequilibrium occurs when:
    Quantity supplied does not equal quantity demanded.
  • What is the most common method of market segmentation?
    Demographic segmentation.
  • Whenever there is a surplus at a particular price, the quantity sold at that price will equal:
    The quantity demanded.
  • A possible result of disequilibrium is:
    A surplus or shortage.
  • When the total market is divided, one of its groups is called a market _______.
    Segment.
  • When prices drop below the point where supply and demand meet, it results in:
    A shortage.
  • When the majority of consumers enters the market, the market reaches its full market potential.
    True; full market potential is reached when most consumers participate.
  • Market differences across regions, states, or neighborhoods create opportunities for:
    Market segmentation and targeted strategies.
  • On a graph, a(n) _______ shows the demand portion of equilibrium.
    Demand curve.
  • On a supply and demand graph, equilibrium is the point where:
    The supply and demand curves intersect.
  • Choose the point on the graph that shows the equilibrium wage.
    The equilibrium wage is at the intersection of the labor supply and demand curves.
  • When supply and demand meet at the equilibrium point, prices in the market will:
    Remain stable unless there is a shift in supply or demand.
  • Which of the following is a potential problem in market economies:
    Market failure due to inefficiencies or externalities.
  • The equilibrium price where the quantity demanded equals the quantity supplied is known as the:
    Market-clearing price.
  • When consumer demand for a product is met by the available supply, the market has reached:
    Equilibrium.