Supply and demand

Supply and demand

Demand

• The willingness and ability of consumers to purchase a good at a given price level

• Demand curve shows the relationship between price and quantity demanded

Law of demand

• Inverse relationship between price and quantity

• As price increases, quantity demanded decreases

• As price decreases, quantity demanded increases

Multiple Select

Select all correct answers. What is true when graphing demand?

• Price is measured on the vertical axis

• The curve's slope is negative

• The curve shows the relationship between quantity demanded and supply

Multiple Choice

A highly effective advertisement has led to increase in the quantity demanded of Martin's spam sandwiches! Does this demonstrate the law of demand?

• Yes

• No

Supply

• The amount of a good/service suppliers are willing to supply at a given price

• Supply curve shows the relationship between price and quantity supplied

Law of supply

• Positive/direct relationship between price and quantity supplied

• As price increases, suppliers are willing to supply more of that good (and vice versa)

Multiple Select

Select all that apply. The law of supply states that__________.

• as price increases, quantity supplied increases

• As prices decrease, supply increases

• As supply increases, demand decreases

• As price decreases, quantity supplied decreases

Multiple Choice

When demand for a good or service is higher than the supply this causes what?

• A surplus

• A shortage

• Equilibrium

• Unemployment

Multiple Choice

Which statement expresses a central idea of how the laws of supply and demand work?

• Consumers and technology determine prices of products.

• The government regulates prices for products

• Prices are determined by the interaction of producers and consumers.

Movements along curves

• Movements are caused by changes in price

• A movement resulting in an increase in quantity demanded/supplied is an EXPANSION

• A movement resulting in a decrease in quantity demanded/supplied is an CONTRACTION

Multiple Select

Select graph(s) demonstrating a movement along the supply curve.

Multiple Choice

Select the graph showing a contraction.