ECON 2001.01 Chapter Notes - Chapter Market Equilibrium: Demand Curve, Market Clearing, Negative Relationship

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beigecod616

12 Sep 2018

School

Ohio State University

Department

Economics

Course

ECON 2001.01

Professor

Jeffrey Buser

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ECON 2001.01 Full Course Notes

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Document Summary

Equilibrium price: the price at which the quantity supplied of a good, service, or resource equals the quantity demanded; the price at which the demand and supply curves intersect. Equilibrium quantity: the quantity traded when the quantity supplied of a good, service, or resource equals its quantity demanded. Markets form to facilitate between buyers and sellers. Sellers want products at highest price and buyers want to pay lowest price. At equilibrium price there is no pressure to change price or quantity. Market = equilibrium then # of trades and anyone can buy or sell a unit at market price. Shortage: a situation in which the quantity demanded is greater than the quantity supplied at the current market price. Surplus: a situation in which the quantity supplied is greater than the quantity demanded at the current market price. Markets naturally move to an equilibrium price where the quantity supplied equals the quantity demanded.

Related Questions

1. Market equilibrium occurs when

a. demand equals supply

b. quantity demanded equals quantity supplied

c. The consumer expectations match the producer's expectations

d. Efficiency and equal distribution are achieved

2. If a surplus exists in a market, then

a. Price is above market equilibrium and quantity demanded is less than quantity supplied

b. Price is below market equilibrium and quantity demanded is less than quantity supplied

c. Price is above market equilibrium and quantity demanded is greater than quantity supplied

d. Price is below market equilibrium and quantity demanded is greater than quantity supplied

3. When the price falls below market equilibrium

a. A surplus occurs

b. A shortage occurs

c. There will be an increase in quantity supplied

d. There will be a leftward shift of the supply curve

amethysttrout886

Which of the following describes the difference between "scarcity" and "shortage"?

A) There is no difference; either word can be used to describe the situation that exists when there is less of a good or service available than people want.

B) There is a shortage of almost everything. Scarcity occurs only if the quantity demanded of a good or service is greater than the quantity supplied at the current market price.

C) There is a scarcity of almost everything. Shortage occurs only if the quantity demanded of a good or service is greater than the quantity supplied at the current market price.

D) There is a scarcity of almost everything. Shortage occurs only if the quantity demanded of a good or service is greater than the quantity supplied at the equilibrium price.