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Supply & Demand
for Unit 3 Supply and demand review
| Question | Answer |
|---|---|
| ______________ indicates how much of a product consumers are both willing and able to buy at each possible price given a period of time. | Demand |
| The law of demand states that price and quantity demanded have a(n) ________________ relationship. | inverse |
| As price goes up, the quantity demanded goes _________________ , and as price goes down, the quantity demanded goes ____________. | down; up |
| The three things that explain the law of demand are: | (1) substitution effect; (2) income effect; (3) law of diminishing marginal utility |
| The ______________ effect states that when the price of a product goes up, people will substitute for a cheaper good. | substitution |
| The _______________ effect is when an individual's income can buy more of all goods when the price of one good declines. | income |
| The law of _________________________states that as a person consumes additional units of a good, eventually the utility gained from each additional unit of the good decreases. | diminishing marginal utility |
| A _______________is a table that shows how much of a product consumers demand at various prices. | demand schedule |
| A _______________ is the graphical representation of the law of demand. | demand curve |
| ______________ is the amount of product that consumers are willing and able to buy at a specific price. | Quantity demanded |
| The sum of the individual demands of all consumers in the market is called the ______________________________. | market demand |
| Price is always shown on the ________ axis and quantity is always shown on the ________ axis in economics. | vertical (y); horizontal (x) |
| The demand curve slopes _________ and has a _____________ slope. | down; negative |
| The demand for a __________ good increases as money income increases, the demand for an______________ good actually decreases as money income increases. | normal; inferior |
| Products that can be used in place of each other are called __________________. | substitutes |
| Certain goods that are often used in combination are called __________________ . | complements |
| _______ or preferences are your likes and dislikes as a consumer. | Tastes |
| A ________________ along a demand curve is caused by a change in price and results in a change in the quantity demanded. | movement |
| A _________________ of the demand curve is caused by one of the determinants of demand other than price and results in a new demand curve. | shift |
| A change in preferences in favor of a good shifts the demand curve to the __________ . | right |
| An increase in income shifts the demand curve of normal goods to the __________ . | right |
| An increase in income shifts the demand curve for inferior goods to the ___________. | left |
| An increase in income will not cause a shift in either direction of a demand curve for ___________ goods. | neutral |
| With complementary goods, the demand for one good moves in the ___________ direction as the price of the other good. | opposite |
| With substitutes, the demand for one good moves in the_____________direction as the price of the other good. | same |
| Factors that cause a shift in demand: | (1)ncome; (2)Tastes; (3) Price of a substitute or price of a complement; (4) Expectations; (5) Size or Composition of the Population |
| _______ indicates how much of a product producers are both willing and able to sell at each possible price during a given period of time. Supply | Supply |
| The law of supply states that price and quantity supplied have a (n) ____________ relationship. | direct |
| As price goes up, the quantity supplied goes ____________ , and as price goes down, the quantity supplied goes ______________. | up; down |
| Two things that explain the law of supply are: | (1) Producers offer more for sale when the price rises because producers are more willing to supply the good; and (2) Higher prices also increase the producer’s ability to supply the good |
| A ____________________ is a table that shows how much of a product producers supply at various prices. | supply schedule |
| A ______________________ is the graphical representation of the law of supply. | supply curve |
| __________ is the amount of product that producers are willing an able to sell at a specific price. | Quantity supplied |
| The sum of the individual supplies of all producers in the market is called the ______________________. | market supply |
| The supply curve slopes up and has a ______________ slope. | positive |
| Factors that cause a shift in supply are: | 1. Cost of resources; 2. Productivity; 3. Changes in technology; 4. Expectations; 5. Number of sellers in the market ; 6. Taxes/subsidies; 7. Government regulations |
| A _____________________ along a supply curve is caused by a change in price and results in a change in the quantity supplied. | movement |
| A ____________ of the supply curve is caused by one of the determinants of supply other than price and results in a new supply curve. | shift |
Created by:
teacherdavidfrost
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