Understanding Demand and Supply

What type of economic system do countries like Japan and the United States have?

• Communist system

• Controlled economy

• Socialist system

• Free enterprise system

Who owns most businesses in a free enterprise system?

• Non-profit organizations

• Foreign companies

• Individuals and groups

• The government

What determines the price of products in a free enterprise system?

• The government

• The market

• The consumers

• The producers

What does the law of demand state?

• Consumers buy more at lower prices

• Consumers buy less at lower prices

• Consumers buy the same amount regardless of price

• Consumers buy more at higher prices

What is the law of supply?

• Producers supply less at higher prices

• Producers supply the same amount regardless of price

• Producers supply more at lower prices

• Producers supply more at higher prices

What is market equilibrium?

• The point where supply exceeds demand

• The point where demand exceeds supply

• The point where prices are highest

• The point where supply and demand meet

What happens when there is a surplus of a product?

• Prices decrease

• Prices increase

• Supply decreases

• Demand increases

What is an example of a market mentioned in the text?

• Hospital

• School

• Supermarket

• Library

What do buyers want in the market?

• More products

• Low prices

• High prices

• Less variety

What is the main question regarding supply and demand?

• How do they affect variety?

• How do they affect location?

• How do they affect quality?

• How do they affect prices?