Question

directions: fill - in - the - blank enter the appropriate word(s) to complete the statement.

1. economists use a(n) ______________ to analyze behavior and predict outcomes.
2. the amount at which the demand for an item matches the supply of it is known as the ______________.
3. a ______________ occurs when the quantity supplied of an item is greater than the quantity demanded at a given price.
4. a ______________ takes place when the quantity demanded of an item is greater than the quantity supplied at a given price.
5. the ______________ is the cost of an item when the amount purchased matches the amount produced.

directions: multiple choice indicate the answer choice that best completes the statement or answers the question.

1. which of these best describes an economic process similar to \haggling\?

a. choice
c. perceived value
b. fluctuation
d. compromise

1. which of these tends to force the price of an item downward?

a. a surplus of that item
b. a shortage of that item
c. attainment of an equilibrium price for that item
d. attainment of an equilibrium quantity of that item

1. which of these tends to force the price of an item upward?

a. a surplus of that item
b. a shortage of that item
c. attainment of an equilibrium price for that item
d. attainment of an equilibrium quantity of that item

1. which of these describes the process of an item finding its economic equilibrium?

a. variation
c. fluctuation
b. direction
d. expectation

1. what are the causes of price changes most of the time?

a. change in demand only
c. changes in supply and demand
b. changes in supply only
d. government policy

Explanation:

1. Economists use models to analyze behavior and predict outcomes. Models simplify real - world situations.
2. The equilibrium price is where demand equals supply. It's the market - clearing price.
3. A surplus occurs when quantity supplied exceeds quantity demanded at a given price.
4. A shortage occurs when quantity demanded exceeds quantity supplied at a given price.
5. The equilibrium price is the cost when the amount purchased matches the amount produced.
6. Compromise is similar to haggling as both involve reaching an agreement on a price.
7. A surplus of an item forces the price down as sellers need to reduce prices to sell excess inventory.
8. A shortage of an item forces the price up as buyers compete for limited goods.
9. Fluctuation describes the process of an item finding its economic equilibrium as prices move up and down.
10. Changes in supply and demand are the most common causes of price changes.

Answer:

1. models
2. equilibrium price
3. surplus
4. shortage
5. equilibrium price
6. D. compromise
7. A. a surplus of that item
8. B. a shortage of that item
9. C. fluctuation
10. C. changes in supply and demand