AP Microeconomics Flashcards: Market Disequilibrium And Changes In Equilibrium

What this deck covers

This deck focuses on Market Disequilibrium And Changes In Equilibrium, giving you a quick way to review the definitions, rules, and examples that matter most for AP Microeconomics.

How to use these flashcards

Work through these flashcards in short sessions. Try to answer each prompt before flipping the card, then revisit any cards you miss until the explanation feels automatic.

Flashcard 1: What is the effect of a decrease in demand on equilibrium quantity?

Answer: Equilibrium quantity decreases. Lower demand shifts curve left, reducing equilibrium quantity.

Flashcard 2: What is market disequilibrium?

Answer: A mismatch between quantity supplied and quantity demanded. This occurs when markets are not in balance at current prices.

Flashcard 3: Identify the effect of a government-imposed quota on equilibrium.

Answer: Limits quantity, raises price. Artificial restriction creates scarcity and higher prices.

Flashcard 4: What happens to equilibrium price if supply increases more than demand?

Answer: Price decreases. Supply increase dominates, creating net downward price pressure.

Flashcard 5: What is the effect of a natural disaster on supply?

Answer: Supply decreases. Disasters reduce production capacity, shifting supply leftward.

Flashcard 6: Identify the effect of an increase in input prices on supply.

Answer: Supply decreases. Higher production costs shift supply curve leftward.

Flashcard 7: What is the effect of a decrease in supply on equilibrium quantity?

Answer: Equilibrium quantity decreases. Lower supply shifts curve left, reducing equilibrium quantity.

Flashcard 8: Identify the effect of an increase in supply on equilibrium price.

Answer: Equilibrium price decreases. Higher supply shifts curve right, lowering equilibrium price.

Flashcard 9: Identify the effect of an increase in input prices on supply.

Answer: Supply decreases. Higher production costs shift supply curve leftward.

Flashcard 10: Find the new equilibrium: Demand decreases; supply remains constant.

Answer: Price decreases; quantity decreases. Leftward demand shift decreases both price and quantity.

Flashcard 11: What is market disequilibrium?

Answer: A mismatch between quantity supplied and quantity demanded. This occurs when markets are not in balance at current prices.

Flashcard 12: Identify the effect of an increase in demand on equilibrium price.

Answer: Equilibrium price increases. Higher demand shifts curve right, raising equilibrium price.

Flashcard 13: What is the impact of a simultaneous decrease in supply and demand?

Answer: Quantity decreases; price is indeterminate. Price depends on relative magnitude of supply and demand changes.

Flashcard 14: Identify the effect of a government-imposed quota on equilibrium.

Answer: Limits quantity, raises price. Artificial restriction creates scarcity and higher prices.

Flashcard 15: What is consumer surplus?

Answer: Difference between what consumers are willing to pay and what they actually pay. Area below demand curve and above market price.

Flashcard 16: Calculate the shortage: Quantity demanded 100, quantity supplied 70.

Answer: Shortage of 30 units. Shortage equals quantity demanded minus quantity supplied.

Flashcard 17: What happens to equilibrium when both supply and demand increase?

Answer: Quantity increases; price is indeterminate. Rightward shifts in both curves increase quantity traded.

Flashcard 18: How does a decrease in consumer income affect demand for normal goods?

Answer: Demand decreases. Lower income reduces purchasing power for normal goods.

Flashcard 19: What is the impact of expectations of future price increases on current demand?

Answer: Current demand increases. Consumers buy more today to avoid higher future prices.

Flashcard 20: Identify the result of excess supply in a market.

Answer: Price tends to decrease. Excess supply creates downward pressure on price through competition.

Flashcard 21: Find the new equilibrium: Demand increases; supply remains constant.

Answer: Price increases; quantity increases. Rightward demand shift increases both price and quantity.

Flashcard 22: How does a decrease in consumer income affect demand for normal goods?

Answer: Demand decreases. Lower income reduces purchasing power for normal goods.

Flashcard 23: Find the new equilibrium: Supply decreases; demand remains constant.

Answer: Price increases; quantity decreases. Leftward supply shift increases price but decreases quantity.

Flashcard 24: What happens when a price floor is set above the equilibrium price?

Answer: It causes a surplus. Quantity supplied exceeds quantity demanded at the floor price.

Flashcard 25: Identify the effect of a subsidy on supply.

Answer: Supply increases. Government payment lowers producers' costs, increasing supply.

Flashcard 26: Identify the effect of a decrease in input prices on supply.

Answer: Supply increases. Lower production costs shift supply curve rightward.

Flashcard 27: What is the impact of expectations of future price increases on current demand?

Answer: Current demand increases. Consumers buy more today to avoid higher future prices.

Flashcard 28: Find the new equilibrium: Supply increases; demand remains constant.

Answer: Price decreases; quantity increases. Rightward supply shift decreases price but increases quantity.

Flashcard 29: What is the effect of a decrease in demand on equilibrium quantity?

Answer: Equilibrium quantity decreases. Lower demand shifts curve left, reducing equilibrium quantity.

Flashcard 30: Calculate the surplus: Quantity supplied 150, quantity demanded 120.

Answer: Surplus of 30 units. Surplus equals quantity supplied minus quantity demanded.

Flashcard 31: What is the impact of a simultaneous decrease in supply and demand?

Answer: Quantity decreases; price is indeterminate. Price depends on relative magnitude of supply and demand changes.

Flashcard 32: What is the role of prices in a market economy?

Answer: Signals for resource allocation and rationing mechanism. Prices coordinate economic activity and distribute scarce resources.

Flashcard 33: Find the new equilibrium: Supply increases; demand remains constant.

Answer: Price decreases; quantity increases. Rightward supply shift decreases price but increases quantity.

Flashcard 34: What happens when a price floor is set above the equilibrium price?

Answer: It causes a surplus. Quantity supplied exceeds quantity demanded at the floor price.

Flashcard 35: What happens when a price ceiling is set below the equilibrium price?

Answer: It causes a shortage. Quantity demanded exceeds quantity supplied at the ceiling price.

Flashcard 36: What is the impact of a simultaneous increase in supply and demand?

Answer: Quantity increases; price is indeterminate. Price depends on relative magnitude of supply and demand changes.

Flashcard 37: Identify the effect of an excise tax on supply.

Answer: Supply decreases. Tax increases producers' costs, shifting supply curve leftward.

Flashcard 38: How does a government-imposed subsidy affect equilibrium?

Answer: Increases supply, lowers price, increases quantity. Subsidies reduce producer costs, shifting supply rightward.

Flashcard 39: How does a decrease in consumer income affect demand for inferior goods?

Answer: Demand increases. Lower income increases demand for cheaper substitute goods.

Flashcard 40: Identify the result of excess demand in a market.

Answer: Price tends to increase. Excess demand creates upward pressure on price through bidding.

Flashcard 41: What is the impact of a simultaneous increase in supply and demand?

Answer: Quantity increases; price is indeterminate. Price depends on relative magnitude of supply and demand changes.

Flashcard 42: What happens to equilibrium when both supply and demand decrease?

Answer: Quantity decreases; price is indeterminate. Leftward shifts in both curves reduce quantity traded.

Flashcard 43: What is the effect of a natural disaster on supply?

Answer: Supply decreases. Disasters reduce production capacity, shifting supply leftward.

Flashcard 44: What happens to equilibrium price if demand increases more than supply?

Answer: Price increases. Demand increase dominates, creating net upward price pressure.

Flashcard 45: What happens to equilibrium price if demand increases more than supply?

Answer: Price increases. Demand increase dominates, creating net upward price pressure.

Flashcard 46: Identify the effect of an excise tax on supply.

Answer: Supply decreases. Tax increases producers' costs, shifting supply curve leftward.

Flashcard 47: Find the new equilibrium: Demand increases; supply remains constant.

Answer: Price increases; quantity increases. Rightward demand shift increases both price and quantity.

Flashcard 48: Identify the effect of technological advancement on supply.

Answer: Supply increases. Lower production costs shift supply curve rightward.

Flashcard 49: Identify the effect of a subsidy on supply.

Answer: Supply increases. Government payment lowers producers' costs, increasing supply.

Flashcard 50: What is the equilibrium price?

Answer: The price at which quantity demanded equals quantity supplied. Market clearing price where supply and demand curves intersect.

Flashcard 51: Identify the effect of technological advancement on supply.

Answer: Supply increases. Lower production costs shift supply curve rightward.

Flashcard 52: What is the role of prices in a market economy?

Answer: Signals for resource allocation and rationing mechanism. Prices coordinate economic activity and distribute scarce resources.

Flashcard 53: Identify the effect of an increase in supply on equilibrium price.

Answer: Equilibrium price decreases. Higher supply shifts curve right, lowering equilibrium price.

Flashcard 54: What is the impact of expectations of future price decreases on current supply?

Answer: Current supply decreases. Producers sell more today before prices fall further.

Flashcard 55: State the law of supply and demand.

Answer: Price adjusts to bring quantity supplied and demanded into balance. Market forces naturally move toward equilibrium through price changes.

Flashcard 56: What is the impact of expectations of future price decreases on current supply?

Answer: Current supply decreases. Producers sell more today before prices fall further.

Flashcard 57: How does a decrease in consumer income affect demand for inferior goods?

Answer: Demand increases. Lower income increases demand for cheaper substitute goods.

Flashcard 58: What is a price ceiling?

Answer: A legal maximum price set below equilibrium. Government intervention preventing market price from rising.

Flashcard 59: Identify the effect of a decrease in input prices on supply.

Answer: Supply increases. Lower production costs shift supply curve rightward.

Flashcard 60: What is producer surplus?

Answer: Difference between what producers receive and the minimum they would accept. Area above supply curve and below market price.

Flashcard 61: Calculate the shortage: Quantity demanded 100, quantity supplied 70.

Answer: Shortage of 30 units. Shortage equals quantity demanded minus quantity supplied.

Flashcard 62: What is consumer surplus?

Answer: Difference between what consumers are willing to pay and what they actually pay. Area below demand curve and above market price.

Flashcard 63: What happens when a price ceiling is set below the equilibrium price?

Answer: It causes a shortage. Quantity demanded exceeds quantity supplied at the ceiling price.

Flashcard 64: What is producer surplus?

Answer: Difference between what producers receive and the minimum they would accept. Area above supply curve and below market price.

Flashcard 65: Identify the result of excess demand in a market.

Answer: Price tends to increase. Excess demand creates upward pressure on price through bidding.

Flashcard 66: Calculate the surplus: Quantity supplied 150, quantity demanded 120.

Answer: Surplus of 30 units. Surplus equals quantity supplied minus quantity demanded.

Flashcard 67: Find the new equilibrium: Supply decreases; demand remains constant.

Answer: Price increases; quantity decreases. Leftward supply shift increases price but decreases quantity.

Flashcard 68: What happens to equilibrium price if supply increases more than demand?

Answer: Price decreases. Supply increase dominates, creating net downward price pressure.

Flashcard 69: Identify the effect of an increase in demand on equilibrium price.

Answer: Equilibrium price increases. Higher demand shifts curve right, raising equilibrium price.

Flashcard 70: What is a price floor?

Answer: A legal minimum price set above equilibrium. Government intervention preventing market price from falling.

Flashcard 71: How does a government-imposed subsidy affect equilibrium?

Answer: Increases supply, lowers price, increases quantity. Subsidies reduce producer costs, shifting supply rightward.

Flashcard 72: Find the new equilibrium: Demand decreases; supply remains constant.

Answer: Price decreases; quantity decreases. Leftward demand shift decreases both price and quantity.

Flashcard 73: State the law of supply and demand.

Answer: Price adjusts to bring quantity supplied and demanded into balance. Market forces naturally move toward equilibrium through price changes.

Flashcard 74: Identify the result of excess supply in a market.

Answer: Price tends to decrease. Excess supply creates downward pressure on price through competition.

Flashcard 75: What is the equilibrium price?

Answer: The price at which quantity demanded equals quantity supplied. Market clearing price where supply and demand curves intersect.

Flashcard 76: What happens to equilibrium when both supply and demand decrease?

Answer: Quantity decreases; price is indeterminate. Leftward shifts in both curves reduce quantity traded.

Flashcard 77: What is the effect of a decrease in supply on equilibrium quantity?

Answer: Equilibrium quantity decreases. Lower supply shifts curve left, reducing equilibrium quantity.

Flashcard 78: What happens to equilibrium when both supply and demand increase?

Answer: Quantity increases; price is indeterminate. Rightward shifts in both curves increase quantity traded.