3rd Monthly Exam in Economics (HS)

Analyze the questions thoroughly. Each question is valued at 2 points.

WORD DEFINITIONS:

EQUILIBRIUM A condition or state in which economic forces are balanced. These economic variables will be unchanged from their equilibrium values in the absence of external influences. Economic equilibrium may also be defined as the point where supply equals demand for a product – the equilibrium price is where the hypothetical supply and demand curves intersect.

DEMANDrefers to how much (quantity) of a product or service is desired by buyers.

SUPPLYrepresents how much the market can offer. The quantity supplied refers to the amount of a certain good producers are willing to supply when receiving a certain price.