Where the curves cross

Civics & Economics · Economics · ages 14-16

Name ______________________ Date ____________

At equilibrium the shelf clears.
Circle one: True False
What is market equilibrium?
- The highest price
- The crossing where quantities match
- A closed shop
The price sits above the crossing. What builds up?
- A surplus
- A shortage
- An equilibrium
How does a surplus push the price back down?
- Sellers cut the price to clear stock
- Buyers pay extra for fun
- Shops order even more
The price sits below the crossing. Who is left disappointed?
- Sellers who sell out early
- Buyers who leave empty-handed
- Nobody at all
How does a shortage pull the price back up?
- Sellers slash prices further
- Buyers bid the price up
- Shelves refill for free
A price ceiling caps tickets low. What follows?
- A shortage, as buyers swarm
- A surplus, as sellers pile in
- A calm clearing of the market
A concert sells out in four minutes. What does that say about the ticket price?
- It sat above the crossing
- It sat at the crossing
- It sat below the crossing

Answer key

For grown-ups. Fold this page away before handing over the rest.

True · Matching quantities leave no pile and no empty shelf.
The crossing where quantities match · At the crossing, wanted and offered agree and the shelf clears.
A surplus · Dear prices bring more sellers than buyers, so goods pile up.
Sellers cut the price to clear stock · Stuck sellers lower prices until buyers take the pile.
Buyers who leave empty-handed · Cheap prices bring more chasers than goods, so buyers miss out.
Buyers bid the price up · Chasing buyers offer more until only enough remain.
A shortage, as buyers swarm · Held-down prices invite more chasers than seats, so shelves empty.
It sat below the crossing · A fast sellout is a shortage, and shortages live below the crossing.