Name: 
 

Economics Ch 6 Quiz



True/False
Indicate whether the sentence or statement is true or false.
 

 1. 

Equilibrium exists in all markets, all the time.
 

 2. 

When there is a surplus, prices tend to rise.
 

 3. 

For equilibrium to change, supply or demand would have to change.
 

 4. 

If everything else remains the same and demand increases, prices will likely drop.
 

 5. 

The winning combination for a high salary is high supply and low demand for a job.
 

 6. 

Selection for positions on sports teams in high school and college can be examined and explained using supply and demand.
 

 7. 

Supply and demand go together to determine price.
 

 8. 

In economics, when quantity supplied is greater than quantity demanded, a shortage exists.
 

 9. 

If a shortage exists, sellers are likely to raise the price of the good.
 

 10. 

Prices will usually rise when there is an increase in demand.
 

 11. 

Since the number of seats available in Yankee Stadium is the same for all games, we could expect prices for tickets to all games to be the same.
 

 12. 

One of the most important functions of price is to send signals to buyers and sellers.
 

 13. 

A price ceiling is a legislated maximum price that is above the equilibrium price.
 

 14. 

Since minimum wage is a legislated minimum price for labor, set by the government, it could be considered an example of a price floor.
 

 15. 

Although similar in style and size, houses in different geographic locations often sell at prices differing in the hundreds of thousands of dollars.
 

 16. 

Goods that can be transported to various locations are likely to have prices that don’t differ much.
 

 17. 

Inventories of suppliers grow beyond the normal level during periods of shortage.
 

 18. 

During a shortage, price and output rise until equilibrium is achieved.
 

 19. 

Sellers who notice that buyers want to purchase less of the seller’s good will usually raise the price to make up the difference.
 

 20. 

A price ceiling creates a shortage in the market.
 

 21. 

A price floor is a legislated minimum price that is below the equilibrium price.
 

 22. 

An unintended effect of a price floor could be a surplus.
 

Multiple Choice
Identify the letter of the choice that best completes the statement or answers the question.
 

 23. 

Equilibrium price is
a.
any price that doesn’t cause a surplus.
b.
any price that doesn’t cause a shortage.
c.
the price that occurs when the quantity demanded is equal to the quantity supplied.
d.
any price that sellers decide to set.
 

 24. 

Which of the following is true when there is a shortage in the market?
a.
Prices may rise.
b.
Prices may fall.
c.
Prices stay the same and producers cut production.
d.
The market is in equilibrium.
 

 25. 

If all else remains the same, a decrease in the demand for a good
a.
will increase sales.
c.
will decrease the price.
b.
will increase the price.
d.
will cause a shortage.
 

 26. 

If a greater supply of labor were combined with decreased demand for labor, we might expect
a.
wages to rise.
c.
wages to remain the same.
b.
wages to fall.
d.
None of the above
 

 27. 

If there were a shortage of nurses, we would expect
a.
the wages of nurses to increase.
c.
a decreased demand for nurses.
b.
the wages of nurses to decrease.
d.
None of the above
 

 28. 

Price controls
a.
decrease the amount of exchange that occurs.
b.
increase the amount of exchange that occurs.
c.
don’t really have an impact on exchange.
d.
increase the opportunities people have to make themselves better off.
 

 29. 

A price floor results in
a.
a shortage.
c.
equilibrium.
b.
a surplus.
d.
a shift of the curve.
 

 30. 

A legal maximum price at which a good can be sold is a
a.
price subsidy.
c.
price floor.
b.
price ceiling.
d.
equilibrium price.
 

 31. 

At the equilibrium price, which of the following is true?
a.
Buyers and sellers are satisfied.
b.
Buyers have bought everything they wanted buy.
c.
Sellers have sold everything they wanted to sell.
d.
All of the above
 

 32. 

When there is a surplus in the market, which of the following is true?
a.
Prices may rise.
b.
Prices may fall.
c.
Prices stay the same and producers increase production.
d.
The market is in equilibrium.
 
 
Use these four graphs to answer the following questions.

Changes in the Equilibrium Price
nar001-1.jpg
 

 33. 

Which graph illustrates what would happen if candy producers are informed that the cost of sugar has doubled?
a.
graph a
c.
graph c
b.
graph b
d.
graph d
 

 34. 

Which graph reflects the impact on the market for homes as new construction companies build houses in Houston, Texas?
a.
graph a
c.
graph c
b.
graph b
d.
graph d
 
 
nar002-1.jpg
 

 35. 

In the accompanying graph, which area shows a surplus?
a.
area 1
c.
area 3
b.
area 2
d.
area 4
 



 
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