Shortage and Surplus in Economics
Explore the concepts of shortage and surplus, their causes, and effects on market equilibrium in this Grade 12 economics worksheet.
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Shortage and Surplus in Economics
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Read each question carefully and provide thoughtful answers based on your understanding of economic principles. Some questions may require you to analyze diagrams.
1. What is the primary cause of a market shortage?
Quantity supplied exceeds quantity demanded
Price is above the equilibrium price
Quantity demanded exceeds quantity supplied
Marginal cost equals marginal revenue
2. A surplus in the market typically leads to:
An increase in price
A decrease in price
No change in price
A shift in the demand curve to the right
3. When the market price is set below the equilibrium price, a will occur.
4. A price floor set above the equilibrium price will result in a .
5. The point where quantity demanded equals quantity supplied is known as .
6. Explain how a market naturally adjusts to eliminate a shortage.
7. Describe the impact of a significant technological advancement on the supply of a product and its potential effect on market equilibrium.
8. Analyze the provided supply and demand graph. Identify the equilibrium price and quantity, and label an area representing a shortage and an area representing a surplus.
9. A binding price ceiling will always lead to a market surplus.
True
False
10. An increase in consumer income will always cause a shortage in the market for all goods.
True
False