Deck 3: Markets, Demand and Supply, and the Price System

Question 1

The amount of a product that people are willing and able to purchase at a specific price is referred to as the:

A)demand.
B)quantity demanded.
C)law of demand.
D)consumption function.
E)purchasing power.

Answer 1

B

Question 2

In a country that depends on the government to decide the allocation of resources,

A)social efficiency is maximized and resources are allocated to where they are most highly-valued.
B)individuals are incentivized to acquire higher skills and education.
C)the allocation system is fair in the sense that everyone gets an equal opportunity.
D)individuals aspire to join the ranks of the government.
E)there is hardly any shortage or scarcity of goods.

Answer 2

D

Question 3

The term barter refers to exchanges made:

A)only with the use of money.
B)without the use of money.
C)outside the U.S.economy.
D)only in underdeveloped countries.
E)within countries in a monetary union.

Answer 3

B

Question 4

Identify the correct statement.

A)Demand is the total quantity of a product that people are willing,even if unable,to purchase at a given price.
B)Demand for a product is the same as the quantity demanded of a product.
C)Demand represents the different quantities of a good or service that provides consumers the same amount of utility.
D)Demand is the quantity of a product that people are willing and able to purchase at different prices.
E)Demand is the quantity of a product that producers are willing to produce at a particular price.

Question 5

Other things remaining the same,an individual demand schedule shows the various quantities of a good:

A)that a person wants and is able to purchase at alternative prices.
B)that are demanded with a change in the quantity demanded of a substitute good.
C)that a person is able to purchase at alternative income levels.
D)that are demanded at various levels of utility.
E)that are demanded by the market at various prices.

Question 6

_______ ensure that resources are allocated to where they are most highly valued.

A)Communist governments
B)Consumers
C)Suppliers
D)Non-governmental organizations
E)Markets

Question 7

The exchange of goods and services directly without money is called:

A)the double coincidence of wants.
B)barter.
C)arbitration.
D)currency trade.
E)illegal trade.

Question 8

According to the law of demand,if the price of movie rentals decreases,ceteris paribus,:

A)the demand for movie rentals would increase.
B)the quantity demanded of movie rentals would decrease.
C)the quantity demanded of movie rentals would increase.
D)the demand for movie rentals would decrease.
E)the quantity demanded of movie rentals would not change.

Question 9

Barter can best be defined as:

A)the direct exchange of one good for money.
B)the direct exchange of money for a good.
C)the direct exchange of goods and services without the use of money.
D)the direct exchange of labor services for wages.
E)the payment of interest on a savings account.

Question 10

The demand curve of a commodity slopes downward because of:

A)the insatiable nature of human wants.
B)the presence of double coincidence of wants.
C)the law of demand.
D)the scarcity of goods and services in an economy.
E)the law of diminishing marginal utility.

Question 11

Money exchanges are more efficient than barter because:

A)money exchanges do not require a double coincidence of wants.
B)the government guarantees the value of money.
C)money usually has an intrinsic value.
D)money is backed by a physical commodity.
E)opportunity costs are higher with barter trades.

Question 12

Given that resources can be allocated by the government,the market,a random process,or on a first-come first-serve basis,which of the following statements is true?

A)The market system is not entirely fair but it creates incentives to increase supplies and improve standards of living.
B)The random process of allocation allows individuals to acquire purchasing power and enhances the value of the resources that they own.
C)Since the government system does not distinguish between those who have income and those that do not,government allocation of resources is the most efficient.
D)There will be no shortages under the first-come first-serve basis of allocation.
E)A random process of allocation is fair in the sense that everyone gains and there are no losers.

Question 13

Which of the following statements is not true about a market system?

A)The market system provides an incentive to consumers to acquire purchasing ability.
B)The market system magnifies the problem of scarcity of goods and services.
C)The market system provides an incentive for allocating resources.
D)The market system provides an incentive to improve the quality of goods produced.
E)The market system provides everything everyone wants to consume.

Question 14

Which of the following determines the quantity demanded of a commodity?

A)The income levels of consumers
B)The price of the commodity
C)The prices of related commodities
D)The number of buyers
E)Consumers' expectations

Question 15

Most markets involve the use of money for transactions because:

A)goods and services can be exchanged more easily with money than without it.
B)goods and services cannot be exchanged without money.
C)using money requires a double coincidence of wants.
D)the transaction costs of using money are very high.
E)the value of money remains same across countries over time.

Question 16

If a society's scarce resources are allocated by the government,which of the following is most likely to result?

A)Only those who circumvent the government's rules will prosper.
B)Under a government allocation,no one will have to do without.
C)It provides an incentive to be a member of government and thus help determine the allocation rules.
D)Under a government allocation,some will have to do without,but the government guarantees that resource allocations are fair.
E)Government allocation provides incentives to increase production and efficiency and to create value.

Question 17

Which of the following statements correctly defines the law of demand?

A)The lower the price of a commodity,the lower the quantity demanded of that commodity.
B)As the price of a commodity increases,the quantity demanded of that commodity also increases.
C)The lower the price of a commodity,the greater the quantity of that commodity that is demanded.
D)The lower the price of a commodity,the greater the quantity of that commodity that is supplied.
E)The quantity demanded of a particular good decreases with an increase in the price of a substitute good.

Question 18

The downward slope of the demand curve is attributed to:

A)the inverse relationship between price and quantity demanded.
B)the direct relationship between income and quantity demanded.
C)the direct relationship between price and quantity demanded.
D)the inverse relationship between income and quantity demanded.
E)the direct relationship between consumer preferences and quantity demanded.

Question 19

Barter requires a double coincidence of wants.This means that:

A)at least two traders must demand a commodity.
B)any two traders involved in a transaction must have money.
C)each trader must demand at least two commodities.
D)either of the two trades involved in a transaction must have money.
E)when two traders are involved in a transaction each trader must want what the other has to offer.

Question 20

Margaret can use her quarterly savings to buy a teakwood study table for her room or spend it on a small Christmas party with her family.The _____ cost of her enjoyment at the Christmas party would then equal the forgone utility of the study table.

A)transaction
B)exchange
C)opportunity
D)direct
E)sunk

Question 21

Every Friday night Elizabeth either goes bowling or goes to the movies.Because the price of bowling went up,Elizabeth now sees more movies.Elizabeth's behavior would be best described as a change in which determinant of demand?

A)Price of complementary goods
B)Expectations
C)Income
D)Number of buyers
E)Price of substitute goods

Question 22

Last year a firm made 1,000 units of its product available at a price of $5 per unit.This year the firm will still make 1,000 units available,but only if the price is $7 per unit.What is most likely to have happened?

A)Supply has increased
B)Supply has decreased
C)Demand has decreased
D)Demand has increased
E)Quantity supplied has increased

Question 23

Which of the following will cause an increase in the quantity demanded of ice cream at an ice cream store?

A)The onset of summer brings about an increase in the temperature.
B)The price of frozen yogurt that is sold at the store is reduced by 5 percent.
C)A new ice cream flavor is introduced at the store.
D)The store introduces a limited period offer of 20 percent off on the price of ice cream.
E)The income of the store's consumers increases.

Question 24

If the price of hot dogs were to decrease,which of the following changes would we expect to occur in the hot dog bun market?

A)The equilibrium price of hot dog buns would decrease and the quantity of hot dog buns sold would increase.
B)The equilibrium price of hot dog buns would increase and the quantity of hot dog buns sold would decrease.
C)The equilibrium price of hot dog buns would increase and the quantity of hot dog buns sold would increase.
D)The equilibrium price of hot dog buns would decrease and the quantity of hot dog buns sold would decrease.
E)The equilibrium price of hot dog buns would stay the same and the quantity of hot dog buns sold would increase.

Question 25

If an increase in the price of good X causes the demand curve for product Y to shift to the right,then X and Y are most likely to be which of the following?

A)Shoes and laces
B)Tennis balls and tennis rackets
C)Turkey and chicken
D)Knives and forks
E)DVD players and DVDs

Question 26

Other things remaining the same,if a large part of the population decided against having soda for health reasons,this would result in:

A)an increase in the quantity of soda supplied.
B)an increase in the quantity supplied of complements like fries and burgers.
C)a decrease in the price of soda.
D)a rightward shift of the demand curve for soda.
E)a decrease in the quantity demanded of substitutes like mineral water.

Question 27

The table given below reports the quantity demanded of a good by individuals 1,2,and 3 at different prices. Table 3.1
Refer to Table 3.1.If Quantity Demanded 1,Quantity Demanded 2,and Quantity Demanded 3 are market demand schedules,then the change from Quantity Demanded 1 to Quantity Demanded 3 may have been due to:

A)an increase in price.
B)an increase in the number of sellers.
C)a decrease in price.
D)a decrease in the number of buyers.
E)a decrease in the price of a substitute good.

Question 28

Other things remaining the same,when a fall in the price of one good is followed by an increase in the demand for another good,both goods are said to be:

A)inferior goods.
B)substitute goods.
C)Giffen goods.
D)public goods.
E)complementary goods.

Question 29

The change in the quantity demanded of any good is always caused by:

A)a change in consumers' preferences for that good.
B)a change in the general income levels of the consumers who buy that good.
C)an increase or decrease in the population.
D)a change in the price of that good.
E)a change in the price of substitute goods.

Question 30

The table given below reports the quantity demanded of a good by individuals 1,2,and 3 at different prices. Table 3.1
Refer to Table 3.1.If Quantity Demanded 1,Quantity Demanded 2,and Quantity Demanded 3 are market demand schedules,then the change from Quantity Demanded 1 to Quantity Demanded 2 may have been due to:

A)an increase in price.
B)a decrease in the number of sellers.
C)an increase in the number of buyers.
D)a decrease in price.
E)an increase in the price of a complementary good.

Question 31

Which of the following is true of the law of supply?

A)The law of supply is the sole determinant of market prices.
B)The law of supply states that as the price of a good rises,the quantity supplied rises.
C)The law of supply holds good only in the long-run.
D)The law of supply is valid only in a market system of allocation.
E)The law of supply asserts that as the cost of producing a good rises,the quantity supplied rises.

Question 32

The table given below reports the quantity demanded of a good by individuals 1,2,and 3 at different prices. Table 3.1
Refer to Table 3.1.Calculate the market demand at prices $5,$4,$3,$2,and $1 respectively.

A)Market demand is 30,40,50,60,and 70
B)Market demand is 30,60,90,120,and 150
C)Market demand is 30,50,70,90,and 1,100
D)Market demand is 10,30,40,50,and 70
E)Market demand is 10,20,30,40,and 50

Question 33

Other things remaining unchanged,which of the following is most likely to cause an increase in the demand for personal computers?

A)A reduction in the price of personal computers.
B)An increase in the supply of personal computers.
C)An increase in the cost of computer printing ink.
D)An increase in the number of computer manufacturers.
E)A requirement by universities that all students buy personal computers

Question 34

Which of the following would lead to a rightward shift in the demand curve for golf balls?

A)An increase in the price of golf clubs
B)A decrease in the popularity of golf
C)An increase in the number of golfers
D)A decrease in the price of golf balls
E)An increase in the golf club membership fee

Question 35

Assume that a hurricane in Brazil destroys half of the coffee crop.Considering that Brazil is a major coffee producing country,consumers expect the price of coffee to increase in the near future.How does this reflect on the demand for coffee?

A)There is a movement upward along the demand curve for coffee.
B)The demand curve for coffee shifts inward.
C)The demand curve for coffee shifts outward.
D)There is a movement downward along the demand curve for coffee.
E)The demand for coffee declines.

Question 36

Margarine and butter can both be used as a spread on toast.This means that they are:

A)independent goods.
B)complementary goods.
C)substitute goods.
D)Giffen goods.
E)inferior goods.

Question 37

Which of the following will cause an inward shift in the demand for steaks at a restaurant?

A)A report by the American Medical Association states that the consumption of steak reduces the risk of cardiovascular disease
B)A 50 percent reduction in the price of steaks
C)A double-digit increase in the price of chicken
D)A recession leading to a significant fall in the income levels of consumers
E)The expectation that the price of steaks will double within two months

Question 38

The market demand curve is derived by:

A)studying an individual's demand for a product over a year.
B)comparing the monthly consumption of a group of people.
C)surveying a set of consumers and ascertaining their preferences.
D)adding up the quantities that consumers in a market are willing and able to purchase at each price.
E)calculating the average price a random sample of consumers are willing to pay for a product.

Question 39

Consider a demand curve for peaches.Which of the following movements will be observed if the price of peaches decline at a point in time?

A)The demand curve will rotate inward at the given price level.
B)The will be a movement up along the demand curve.
C)The demand curve will rotate outward at the given price level.
D)There will be a movement down along the demand curve.
E)There will be no change in the demand curve.

Question 40

Which of the following will have no impact on the demand for ice cream?

A)A change in population size
B)A change in the price of ice cream
C)A change in seasons
D)A change in consumer preferences
E)A change in consumer incomes

Question 41

The table given below reports the quantity of bread loaves demanded and supplied at different per unit prices. Table 3.3
Refer to Table 3.3.Which of the following would occur in the market for bread if the market price exceeded the equilibrium price by $1?

A)The quantity of bread demanded in the market would increase
B)The bread market would face a surplus of 36 loaves of bread
C)The supply of bread in the market would increase
D)The bread market would face a shortage of 72 loaves of bread
E)The demand for bread in the market would decrease

Question 42

The table given below reports the quantity demanded and supplied of a commodity in a market at different price levels. Table 3.4
Refer to Table 3.4.In the market represented by this table,at equilibrium:

A)the market price is $5 per unit.
B)there is a surplus of 900 units.
C)there is a shortage of 900 units.
D)900 units are traded at a price of $3 per unit.
E)the market price is $1 per unit and the quantity traded is 500 units.

Question 43

The figure given below represents the equilibrium in the market for bicycles under different demand and supply situations.The vertical axis in each panel shows the price of bikes. Figure 3.2
Refer to Figure 3.2.Which of the following panels represents the equilibrium situation in the bicycle market,if there were an increase in the price of metal used in the production of bicycles?

A)Panel A
B)Panel B
C)Panel C
D)Panel D
E)Panel E

Question 44

Other things remaining unchanged,which of the following is a determinant of the quantity supplied of a good?

A)The cost of inputs used in production
B)The price of the product
C)The income levels of consumers
D)The price expectations of producers
E)The preferences of consumers

Question 45

In the figure given below D₁ and S₁ are the initial demand and supply curves for a commodity in the market. Figure 3.3
Refer to Figure 3.3.If the change in the demand in this market occurred before the change in supply,then starting from the initial equilibrium:

A)firms would experience a fall in profits and then a gradual increase in profits after the change in supply occurred.
B)there would be an immediate shortage,lasting until the price reaches P₂.
C)price would change from P₁ to P₂ after the change in demand and would change again from P₃ to P₄ after the change in supply.
D)there would be a surplus until the price reaches P₄.
E)there would be a surplus even after price reaches P₄.

Question 46

If both supply and demand for a good increase,which of the following will definitely happen?

A)Equilibrium price will remain the same
B)Equilibrium price will increase
C)Equilibrium price will decrease
D)Equilibrium quantity will increase
E)Equilibrium quantity will decrease

Question 47

Assume that Ford Motor Company engineers achieve a revolutionary technological breakthrough in the production process of automobiles.Which of the following is expected to take place?

A)A movement up the existing supply curve for Ford automobiles
B)The supply of Ford automobiles will remain unchanged
C)An inward shift of the supply curve for Ford automobiles
D)A movement down along an existing supply curve for Ford automobiles
E)An outward shift of the supply curve for Ford automobiles

Question 48

The below figure shows the demand and supply of DVD rentals in a city.S₁ and D₁ are the
Original supply and demand curves.The demand curve shifts from D₁ to D₂.
Figure 3.4
Refer to Figure 3.4 and identify the true statement.

A)The supply of DVD rentals has decreased.
B)The original equilibrium quantity was 57.
C)The new equilibrium price is $3.
D)The demand for DVD rentals has decreased.
E)The new equilibrium quantity is 48.

Question 49

The below figure shows the demand and supply curves in the market for coffee.S₁ and D₁ are the original demand and supply curves. Figure 3.5
Based on Figure 3.5,which of the following conditions would most likely move the point of equilibrium from A to D?

A)An increase in the income of a coffee buyer.
B)A decrease in the price of coffee.
C)A drought in Colombia,a major coffee producer,that affects the coffee harvest.
D)A decrease in the price of non-dairy creamers that are consumed along with coffee.
E)An increase in the price of tea,assumed to be a substitute for coffee.

Question 50

The market supply curve for any product:

A)always depends on the market demand for that product.
B)depends on the general income level of the consumers in the market.
C)is a summation of individual firms' supply curves.
D)equals the total revenue generated through sale of the commodity.
E)is affected by the prices of related products.

Question 51

In the figure given below D₁ and S₁ are the original demand and supply curves. Figure 3.1
Refer to Figure 3.1.If demand shifts from D₁ to D₂ and supply shifts from S₁ toS₂:

A)equilibrium price will rise to F,but equilibrium quantity will remain at B
B)equilibrium price will move to C and equilibrium quantity to G
C)demand will decrease and supply will increase.
D)equilibrium price will rise to G,and equilibrium quantity will remain at B
E)both equilibrium price and equilibrium quantity will decrease.

Question 52

The table given below represents the supply schedules of the only three DVD producers in the market for DVDs. Table 3.2
According to Table 3.2,if the supply schedules 1,2,and 3 are the market supply schedules for DVDs in three different time periods,what could explain the change from the Supply 1 schedule to the Supply 2 schedule?

A)A decrease in the price of DVDs
B)A decrease in the cost of DVD players
C)A change in consumer preferences
D)A change in the average income of consumers
E)An increase in the cost of producing DVDs

Question 53

Ceteris paribus,a change in the quantity supplied along the supply curve of Braun coffee makers is:

A)directly related to the price of a Morphy Richards coffee maker.
B)directly related to the price of milk and cream.
C)directly related to the prices of inputs used in the production of Braun coffee makers.
D)directly related to changes in the technology used in producing coffee makers.
E)directly related to the price of a Braun coffee maker.

Question 54

The output level that occurs in any market that is in equilibrium:

A)is the quantity where the supply curve intersects the y-axis.
B)is the quantity where the demand curve intersects the x-axis.
C)is the quantity at an output level where buyers will pay more than suppliers require.
D)is an output level where buyers will not pay as much as suppliers require.
E)means consumers or producers cannot be made better off by an expansion or contraction of output.

Question 55

When will a shortage occur in a market?

A)When the actual price is lower than the equilibrium price
B)When quantity supplied is greater than the equilibrium quantity
C)When the quantity that consumers are willing and able to purchase decreases
D)When the quantity available at zero price is insufficient to meet demand
E)When a price floor is set in the market

Question 56

The table given below reports the quantity of bread loaves demanded and supplied at different per unit prices. Table 3.3
According to Table 3.3,equilibrium in the market for bread occurs at the price of:

A)$2 per unit
B)$3 per unit
C)$4 per unit
D)$4.5 per unit
E)$1.5 per unit

Question 57

Consider the market described by Table 3.4.Identify the correct statement.

A)The law of demand is violated
B)The law of supply is violated
C)There is no equilibrium
D)At $5 per unit,people will purchase 400 units
E)At $2 per unit,people will purchase 900 units

Question 58

A rightward shift of a market supply curve might be caused by:

A)the entry of new firms in the industry.
B)an increase in the wages of labor employed in the industry.
C)an increase in the price of the final product.
D)a decrease in the income of consumers.
E)an increase in the price of a substitute good.

Question 59

The relationship between prices and the corresponding quantities supplied is shown in a:

A)supply schedule.
B)demand schedule.
C)price-earnings ratio.
D)demand curve.
E)production schedule.

Question 60

Assume that at the current market price of $4 per unit of a good,you are willing and able to buy 20 units.Last year at a price of $4 per unit,you would have purchased 30 units.What is most likely to have happened over the last year?

A)Demand has increased
B)Demand has decreased
C)Supply has increased
D)Supply has decreased
E)Quantity supplied has decreased

Question 61

In general,the purpose of markets is to facilitate the exchange of goods and services between buyers and sellers.

Question 62

Without money,no transaction can occur.

Question 63

An example of barter is voluntary work at an old-age home.

Question 64

The below figure shows the demand and supply curves in the market for gasoline.The price and quantity at the point of intersection of the demand and supply curves is $30 and 300 gallons respectively. Figure 3.6
Assume that the market for gasoline in Figure 3.6 is in equilibrium.What is the most likely consequence of a government-imposed price ceiling at $10 per unit?

A)The profit made by gasoline producers will increase.
B)The demand for gasoline will decrease.
C)The quantity of gasoline supplied to the market will decrease.
D)There will be a surplus of gasoline in the market.
E)The demand curve for gasoline will shift to the right.

Question 65

The demand for luxurious goods are usually unaffected by an increase in income.

Question 66

The removal of a price ceiling in a market results in:

A)an increase in the market price.
B)a shortage in the market.
C)over-production of the commodity and a surplus.
D)a fall in the market price.
E)abnormal profits for producers.

Question 67

Inferior goods are low quality goods that people prefer to buy less of.

Question 68

The table given below reports the quantity demanded and supplied of a commodity at different prices in a market. Table 3.5
Refer to Table 3.5.If government imposes a price ceiling of $2:

A)the price will be above equilibrium.
B)the price will fall to $1 because producers will be forced to incur losses.
C)demand will increase.
D)a surplus will result equal to 20 units.
E)a shortage will result equal to 20 units.

Question 69

The table given below reports the quantity demanded and supplied of a commodity at different prices in a market. Table 3.5
Refer to Table 3.5.If government imposes a price floor of $2:

A)the price floor will not have an effect.
B)the price will fall to $1 because producers will be forced to incur losses.
C)demand will increase.
D)a surplus will result equal to 20 units.
E)a shortage will result equal to 20 units.

Question 70

According to the law of demand,when the price of a BMW or a Gucci purse increases,the quantity demanded of these goods will also increase because consumers consider them prestigious.

Question 71

The leaders of the reforms in the countries that turned from government-run economies to market economies were told by their economic advisers to watch the price of eggs,not the heavy industries such as power generation and oil refining,because:

A)eggs are the cheapest commodities that people consume.
B)people like to eat eggs.
C)eggs have many different nutrients that people need.
D)they anticipated that the market for eggs would be the quickest to emerge.
E)the market for eggs can be easily controlled by the government.

Question 72

It is absolutely necessary for at least one trader to have money for barter exchange to take place.

Question 73

A market survey conducted by an electronics manufacturer reported a year on year growth in the sale of television sets,along with an increase in the selling price.Which of the following could be a likely cause for this situation?

A)A decrease in supply
B)An increase in demand
C)A decrease in demand
D)An exception to the law of demand
E)An increase in supply

Question 74

According to the law of demand,if the price of a netbook decreases,ceteris paribus,the demand for netbooks would increase.

Question 75

The table given below reports the quantity demanded and supplied of a commodity at different prices in a market. Table 3.5
Refer to Table 3.5.If government imposes a price ceiling of $4:

A)the price ceiling will not have an effect.
B)the price will fall to $1 because producers will be forced to incur losses.
C)demand will increase.
D)a surplus will result equal to 20 units.
E)a shortage will result equal to 20 units.

Question 76

In the market for eggs,a removal of the price ceiling on eggs results in:

A)an increase in the demand for eggs.
B)farmers supplying more eggs to the market.
C)consumers demanding a larger quantity of eggs.
D)farmers supplying more eggs to the market.
E)consumers demanding a smaller quantity of eggs.

Question 77

Which of the following is true of a price floor?

A)A price floor allows supply and demand to function effectively.
B)A price floor is set such that the price is not allowed to increase above a certain level.
C)A price floor is beneficial to buyers in a market.
D)A price floor usually creates a shortage of a good in a market.
E)A price floor is set such that the price is not allowed to decrease below a certain level.

Question 78

When a freely functioning market is in disequilibrium:

A)the government must set a price ceiling.
B)the government must set a price floor.
C)the price and quantities demanded and/or supplied change until equilibrium is established
D)it will continue to remain in disequilibrium.
E)it will reach equilibrium at a very high/low price.

Question 79

Which of the following is not an example of a price ceiling?

A)The Chinese government sets the price of housing in China below equilibrium.
B)The government of the former Soviet Union set prices on food below those prevailing in the free market.
C)In the 1970s,the Nixon administration imposed wage and price controls,thereby keeping wages and prices from rising.
D)In the late 1970s,the U.S.government required gasoline to be sold at a price per gallon that was below what would have prevailed in a free market.
E)The U.S.government requires that sugar be sold at a price that exceeds the world price of sugar.

Question 80

In a market where the price is restricted by price floors or price ceilings,

A)all sellers will be able to sell everything they produce.
B)surpluses and shortages will exist.
C)all buyers will get what they want.
D)disequilibrium will automatically correct itself.
E)surpluses and shortages will put pressure on the price to move to its equilibrium.