Question 1

What is market equilibrium?

Accepted Answer

When the price at which quantities demanded and supplied are equal

Question 2

What is a shortage?

Accepted Answer

When the quantity demanded exceeds the quantity supplied (below the equilibrium)

Question 3

What is a surplus?

Accepted Answer

When the quantity demanded cannot meet the quantity supplied (above the equilibrium)

Question 4

What happens to equilibrium when demand or supply changes?

Accepted Answer

There is a new equilibrium price and quantity

Question 5

What is market disequilibrium?

Accepted Answer

When prices fluctuate away from equilibrium, resulting in either a surplus or a shortage

Question 6

What is a price floor?

Accepted Answer

A government-induced limit on how low a price can be charged for a product

(can cause market disequilibrium)

Question 7

What is a price ceiling?

Accepted Answer

A government-induced limit on how high a price can be charged for a product

(can cause market disequilibrium)

1.6 Market Equilibrium, AP Macroeconomics Flashcards