Ch. 4. Equilibrium

Question 1

Market Economics

Answer 1

Each individual makes their own production and consumption decisions, buying and selling in markets

Question 2

Planned Economics

Answer 2

Centralized decisions are made about what is produced, how, by whom and who gets what

Question 3

Market

Answer 3

A market is any setting that brings together potential buyers and sellers

Question 4

Equilibrium

Answer 4

The point at which there is no tendency to change
Quantity Demanded = Quantity Supplied

Question 5

Equilibrium Price

Answer 5

Optimal price in a market

Question 6

Equilibrium Quantity

Answer 6

Optimal quantity in a market

Question 7

Shortage

Answer 7

When the quantity demanded exceeds the quantity supplied

Question 8

Surplus

Answer 8

When the quantity demanded is less than quantity supplied