Title: QUIZ: Market Equilibrium Module
Course: Recommended Resources for AP Micro from FRE > Section: Unit 2: Supply and Demand

Q: If the number of consumers in the market for good A increases, what will happen to the equilibrium price and quantity of good A?
- Equilibrium price and quantity will both decrease.
- Equilibrium price and quantity will both increase.
- Equilibrium price will increase, and equilibrium quantity will decrease.
- Equilibrium price will decrease, and equilibrium quantity will increase.
A: Equilibrium price and quantity will both increase.
If right: That’s correct!
If wrong: An increase in the number of consumers would cause the demand curve for milk to shift to the right, resulting in an increase in equilibrium price and an increase in equilibrium quantity.

Q: A government-imposed price floor, above the equilibrium price, in the market for a good or service will result in
- a surplus of the good or service.
- a shortage of the good or service.
- lower prices for consumers.
- equilibrium.
A: a surplus of the good or service.
If right: That’s correct!
If wrong: A price floor is a legal barrier that holds a price above the equilibrium price, which causes a surplus of the good or service.

Q: If producers expect the price of a good to rise, what will happen to the good’s equilibrium price and quantity?
- Equilibrium price and quantity will both decrease.
- Equilibrium price and quantity will both increase.
- Equilibrium price will increase, and equilibrium quantity will decrease.
- Equilibrium price will decrease, and equilibrium quantity will increase.
A: Equilibrium price will increase, and equilibrium quantity will decrease.
If right: That’s correct!
If wrong: If producers expect the price to rise and store part of their current production in hopes of selling it for a higher price in the future, the current supply will decrease. The supply curve would shift to the left, resulting in an increase in equilibrium price and a decrease in equilibrium quantity.

Q: Which of the following is an example of a price floor?
- Taxes
- Subsidies
- Minimum wage
- Rent controls
A: Minimum wage
If right: That’s correct!
If wrong: A minimum wage is a price floor that holds a price above market equilibrium.

Q: A government enforced price ceiling creates a _____.
- shortage
- surplus
A: shortage
If right: That’s correct!
If wrong: By setting a price level below equilibrium, suppliers will provide a quantity less than what consumers will demand.

Q: Drinking lemonade becomes a new fad.  Based on that information, the equilibrium price for soft drinks _____.
- increases
- decreases
A: decreases
If right: That’s correct!
If wrong: A decrease in the demand for soft drinks would decrease the equilibrium price of soft drinks.

Q: Drinking lemonade becomes a new fad.  Based on that information, the equilibrium quantity for soft drinks _____.
- increases
- decreases
A: decreases
If right: That’s correct!
If wrong: A decrease in the demand for soda would decrease the equilibrium quantity of soft drinks.

Q: Drinking lemonade becomes a new fad. Using the illustration, which graph shows the change in the soft drink market?
- Graph 1
- Graph 2
- Graph 3
- Graph 4
A: Graph 2
If right: That’s correct!
If wrong: As consumers switch from soda to lemonade, the demand for soda will decrease or shift left. The correct graph is #2.

Q: The point where the demand and supply curves intersect is known as _____.
- market equilibrium
- equilibrium price
- equilibrium quantity
- disequilibrium
A: market equilibrium
If right: That’s correct!
If wrong: The intersection of supply and demand shows the equilibrium for the entire market.

Q: If a market is in equilibrium at 300 chocolate bars demanded at $1.20, what form of disequilibrium would occur if the price decreases to $0.40?
- A surplus of chocolate bars in the market
- A shortage of chocolate bars in the market
- There is no disequilibrium in the market.
- The market no longer exists.
A: A shortage of chocolate bars in the market
If right: That’s correct!
If wrong: If the price decreases to $0.40, consumers will demand 500 chocolate bars while suppliers will only provide 100. As a result, there is now a shortage in this market.

Q: If a government installs a price ceiling, the new controlled price should be ____ the existing equilibrium price, creating a ____ in the market.
- above ; surplus
- above ; shortage
- below ; surplus
- below ; shortage
A: below ; shortage
If right: That’s correct!
If wrong: A price ceiling must be below the existing equilibrium price to be effective. The consequence of a ceiling is that demand will exceed supply, creating a shortage.

Q: If the price to make a good increases for suppliers, what will happen to the equilibrium price and quantity?
- Equilibrium price and quantity will both decrease.
- Equilibrium price and quantity will both increase.
- Equilibrium price will increase, and equilibrium quantity will decrease.
- Equilibrium price will decrease, and equilibrium quantity will increase.
A: Equilibrium price will increase, and equilibrium quantity will decrease.
If right: That’s correct!
If wrong: An increased price of an input to make a good will cause the equilibrium price to increase as it’s more expensive to produce, but it will decrease the overall supply.