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1. In a market, the equilibrium price is determined by:
What buyers are willing and able to purchase
What sellers are willing and able to offer for sale
Both demand and supply

The government
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2. The market mechanism is consistent with:
A trial and error process
The invisible hand
Equilibrium
All of the above

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3. Suppose there are buyers and sellers in a market but no exchange takes
place. Assume there is no government intervention in this market. This
implies that:
The price must be so high that no one can afford this good

There must be a shortage of the good

The market supply and demand curves do not intersect

Market demand must be upward sloping

A market shortage is: The amount by which the quantity demanded exceeds the quantity supplied at a given price A situation of excess demand . A ballet performance had many empty seats.00 of 1 4. When a surplus exists for a product. then: Producers increase supply Consumers increase demand Government purchases decrease Producers reduce the level of output and reduce price Score 1. This implies that the: Hall where the performance was being held was very large Price of the tickets must have been very low because of the low demand Ballet group was not very well known Price of the tickets must have been above the equilibrium price Score 1.00 of 1 5.00 of 1 6.Score 1.

00 of 1 7.A situation in which people cannot buy all of the goods they are willing and able to buy at t All of the above Score 1.00 of 1 8.00 of 1 9. Tickets for a rock concert were sold out several weeks before the performance. ceteris paribus. A leftward shift of the market demand curve for HDTVs. ceteris paribus. causes the equilibrium: Price to increase and quantity to decrease Price to decrease and quantity to decrease Price to increase and quantity to increase Price to decrease and quantity to increase Score 1. A rightward shift of the market demand curve for MP3 players. causes equilibrium: Price to increase and quantity to decrease Price to decrease and quantity to decrease . This implies that the: Stadium where the concert was being held was very small Price of the tickets must have been very high because of the high demand Rock group must be very popular Price of the tickets must have been below the equilibrium price Score 1.

ceteris paribus.Price to increase and quantity to increase Price to decrease and quantity to increase Score 1. When the demand for Play Station II increases.00 of 1 10. the equilibrium price will also increase because: A shortage exists at the old equilibrium price There must be a surplus of the good The market supply and demand curves do not intersect Market demand must be upward sloping .