AP Macroeconomics 1.6.2: Utility Choices

Predict how price and income changes alter utility-maximizing quantities of goods.

[Maximum number: 1]

． Shirts are bought and sold in a competitive market．If there are 1,200 shirts available for sale but consumers would like to purchase 1，500 shirts at the current market price，which of the following is true？

A

（A） The current market price is higher than the equilibrium market price．

B

（B） The market is experiencing a shortage．

C

（C） The market is experiencing a surplus．

D

（D） The market is in equilibrium．

E

（E） The quantity supplied is greater than the quantity demanded．

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MKT-2.F—a. Define a surplus and shortage. b. Explain (using graphs as appropriate) how prices adjust to restore equilibrium in markets… question 1