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Social Sci LibreTexts

3.9: Review Questions

  • Page ID
    215594
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    Important Questions to Test Your Understanding

    • What determines the level of prices in a market?
    • What does a downward-sloping demand curve mean about how buyers in a market will react to a higher price?
    • Will demand curves have the same exact shape in all markets? If not, how will they differ?
    • Will supply curves have the same shape in all markets? If not, how will they differ?
    • What is the relationship between quantity demanded and quantity supplied at equilibrium? What is the relationship when there is a shortage? What is the relationship when there is a surplus?
    • How can you locate the equilibrium point on a demand and supply graph?
    • If the price is above the equilibrium level, would you predict a surplus or a shortage? If the price is below the equilibrium level, would you predict a surplus or a shortage? Why?
    • When the price is above the equilibrium, explain how market forces move the market price to equilibrium. Do the same when the price is below the equilibrium.
    • What is the difference between the demand and the quantity demanded of a product, say milk? Explain in words and show the difference on a graph with a demand curve for milk.
    • What is the difference between the supply and the quantity supplied of a product, say milk? Explain in words and show the difference on a graph with the supply curve for milk.
    • When analyzing a market, how do economists deal with the problem that many factors that affect the market are changing at the same time?
    • Name some factors that can cause a shift in the demand curve in markets for goods and services.
    • Name some factors that can cause a shift in the supply curve in markets for goods and services.
    • How does one analyze a market where both demand and supply shift?
    • What causes a movement along the demand curve? What causes a movement along the supply curve?
    • Does a price ceiling attempt to make a price higher or lower?
    • How does a price ceiling set below the equilibrium level affect quantity demanded and quantity supplied?
    • Does a price floor attempt to make a price higher or lower?
    • How does a price floor set above the equilibrium level affect quantity demanded and quantity supplied?
    • What is consumer surplus? How is it illustrated on a demand and supply diagram?
    • What is producer surplus? How is it illustrated on a demand and supply diagram?
    • What is total surplus? How is it illustrated on a demand and supply diagram?
    • What is the relationship between total surplus and economic efficiency?
    • What is deadweight loss?

    This page titled 3.9: Review Questions is shared under a CC BY 4.0 license and was authored, remixed, and/or curated by .

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