Supply and Demand-Part Two

The law of supply states that, other things equal,

• an increase in price causes quantity supplied to increase.

• an increase in price causes quantity supplied to decrease.

• an increase in quantity supplied causes price to increase.

• an increase in quantity supplied causes price to decrease.

If something happens to alter the quantity supplied at any given price, then

• we move along the supply curve.

• the supply curve shifts.

• the supply curve becomes steeper.

• the supply curve becomes flatter.

A decrease in the price of a good will

• increase supply.

• decrease supply.

• increase quantity supplied.

• decrease quantity supplied.

Much of the tea in the U.K. is imported from India. If wages for Indian tea workers rose, thus increasing input costs, how would this effect supply of tea in the U.K.?

• Supply would increase

• Supply would Decrease

• Supply would stay the same

• India is not a real country

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

• The government sets the prices for goods and services.
• Prices are determined by the interaction of producers and consumers.
• Consumers alone determine the prices for goods and services.
• Technology dictates the prices charged for goods and services.

Point at which supply and demand come together

• price ceiling
• excess demand
• equilibrium
• disequilibrium

If the price of a good is ________________ than the equilibrium price, the quantity supplied of the good will be greater than the quantity demanded.

• Lower 
• Higher
• Supply
• Resources