AP®︎ Macroeconomics: Topic 1.6 Flashcards

Master key terms and definitions for Topic 1.6 of AP Macroeconomics – Market Equilibrium, Disequilibrium, and Changes in Equilibrium to help you prep for quizzes and the AP exam.

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Term

Market Disequilibrium

Definition

A market condition where quantity demanded and quantity supplied are unequal.

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Market Disequilibrium
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A market condition where quantity demanded and quantity supplied are unequal.

MKT-2.FMKT-2.F.1
Surplus
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A condition where quantity supplied exceeds quantity demanded at a given price.

MKT-2.FMKT-2.F.1
Shortage
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A condition where quantity demanded exceeds quantity supplied at a given price.

MKT-2.FMKT-2.F.1
Price Adjustment Toward Equilibrium
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Surpluses push price down, while shortages push price up until quantities are equal.

MKT-2.FMKT-2.F.1
Calculating Surplus or Shortage
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Subtract the smaller quantity from the larger at the disequilibrium price.

MKT-2.F
Changes in Equilibrium from Demand and Supply Shifts
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Demand or supply shifts create a new equilibrium price and quantity.

MKT-2.GMKT-2.G.1
Increase in Demand
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Raises equilibrium price and equilibrium quantity, assuming supply is unchanged.

MKT-2.GMKT-2.G.1
Decrease in Demand
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Lowers equilibrium price and equilibrium quantity, assuming supply is unchanged.

MKT-2.GMKT-2.G.1
Increase in Supply
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Lowers equilibrium price and raises equilibrium quantity, assuming demand is unchanged.

MKT-2.GMKT-2.G.1
Decrease in Supply
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Raises equilibrium price and lowers equilibrium quantity, assuming demand is unchanged.

MKT-2.GMKT-2.G.1
Market Equilibrium
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The market-clearing point where quantity demanded equals quantity supplied at one price.

MKT-2.EMKT-2.E.1