Lesson 4.1.3.5
4.1.3.5 The determination of equilibrium market prices Quiz: AQA Economics, Unit 1
20 questions
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Lesson 4.1.3.5, The determination of equilibrium market prices: 20 multiple choice questions for the AQA Economics (7136), Unit 1: Individuals, firms, markets and market failure, written with Revision Ninja.
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The 20 questions
-
What condition defines the equilibrium price in a market?
- Demand exceeds supply
- Supply exceeds demand
- Marginal cost zero
- Demand equals supply
-
Demand is Qd = 120 - P and supply is Qs = 2P - 30. What is the equilibrium price?
- P = 70.
- P = 40.
- P = 50.
- P = 60.
-
With demand Qd = 120 - P and supply Qs = 2P - 30, what is the equilibrium quantity?
- Q = 70.
- Q = 50.
- Q = 80.
- Q = 60.
-
Using Qd = 120 - P and Qs = 2P - 30, what is the level of excess demand at a price of £40?
- Excess demand of 30.
- Excess supply of 30.
- Excess demand of 50.
- Excess demand of 10.
-
With demand Qd = 120 - P and supply Qs = 2P - 30, what is the level of excess supply at a price of £60?
- Excess demand of 30.
- Excess supply of 30.
- Excess supply of 10.
- Excess supply of 60.
-
What price movement is caused by excess demand in a market?
- Upward price pressure
- Immediate price collapse
- Downward price pressure
- Unchanged market price
-
What situation creates excess supply in a market?
- Supply exceeds demand
- Price equals zero
- Demand exceeds supply
- Demand equals supply
-
What causes price to fall when a market experiences excess supply?
- Shortage of goods
- Increased buyer competition
- Unsold stock accumulation
- Rising production costs
-
What characterizes a market in equilibrium compared to disequilibrium?
- Persistent stock shortages
- No price change
- Falling price pressure
- Rising price pressure
-
If demand rises while price remains temporarily unchanged at equilibrium, what immediately occurs?
- Price fall
- Market equilibrium
- Excess demand
- Excess supply
-
What happens to equilibrium price and quantity when supply shifts left?
- Price falls, quantity falls
- Price falls, quantity rises
- Price rises, quantity falls
- Price rises, quantity rises
-
A rise in demand and a rise in supply both occur in the same market. Which outcome is certain?
- Equilibrium quantity falls.
- Equilibrium price falls.
- Equilibrium price rises.
- Equilibrium quantity rises.
-
If demand and supply both fall but equilibrium price is unchanged, how do the shifts compare?
- Supply shift larger
- Demand shift larger
- Zero shift size
- Equal size shifts
-
Which market action illustrates price adjusting to eliminate excess demand?
- Cutting worker wages
- Discounting unsold stock
- Increasing production tax
- Raising ticket prices
-
Which assumption is fundamental to the basic demand and supply model?
- Ceteris paribus
- Government price fixing
- Monopoly power
- Increasing unit costs
-
Why must economists consider the assumptions of the demand and supply model?
- Models are exact
- Real markets differ
- Prices never change
- Elasticity is constant
-
What is the effect of a binding maximum price set below market equilibrium?
- Persistent surplus
- Persistent shortage
- Market clearing
- Falling demand
-
Demand shifts right while supply shifts left by equal amounts. What happens to equilibrium price?
- It falls
- It rises
- It remains unchanged
- It becomes zero
-
Which factor can prevent a market from quickly clearing and returning to equilibrium?
- Free market entry
- Factor mobility
- Perfect information
- Sticky prices
-
If quantity demanded is 60 units and quantity supplied is 90 units, price will:
- Fluctuate randomly
- Rise
- Stay unchanged
- Fall
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