Supply and Demand

What is the law of supply?

• As the price of a good or service increases, the quantity supplied of that product increases.

• As the price of a good or service decreases, the quantity supplied of that product decreases.

• As the price of a good or service increases, the quantity supplied decreases.

• As the price of a good or service decreases, the quantity supplied increases.

What is the law of demand?

• The desire to own something.

• When a good’s price is lower, consumers will buy more of it. When a good’s price is higher, consumers will buy less of it.

• Describes how much of a good is offered for sale at a specific price.

• The higher the price, the larger the quantity produced.

A demand schedule shows ______________

• The listing of quantities demanded at various prices

• the upward sloping curve

• fluctuations in demand that occured over time

• the fluctuations of demand that are to come in following year

All of the following cause a shift of the demand curve except…

• Number of sellers increase

• Consumer preferences change

• Consumer Income changes

• Consumers expect lower prices in the future

What causes a movement along the demand curve?

• Change in price

• Change in consumer preferences

• Change in consumer expectations

• Change in consumer income

What causes a movement along the supply curve?

• Change in price

• Change in number of suppliers

• Change in expectations of suppliers

• Change in production costs

An increase in the price of jelly causes a decrease in demand for peanut butter. The products are ...

• Substitutes

• Complements

• Unrelated

• Goods

All of the following can change the supply curve EXCEPT

• cost of labor

• expectation that prices are about to increase

• change in demand for the product

• # of sellers

The law of demand states that if the price of CD’s rise, consumers will

• Buy more CDs

• Buy fewer CDs

• Quantity demanded will not change

• Buy no CDs

The law of supply states that if the price of CD’s rise, suppliers will

• Supply more CDs

• Supply fewer CDs

• Quantity supplied will not change

• Supply no CDs