Understanding Supply and Demand

What does the supply curve represent in economics?

• The relationship between the price of a good and the quantity demanded

• The relationship between the price of a good and the quantity supplied

• The relationship between consumer income and quantity demanded

• The relationship between consumer preferences and quantity supplied

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DOK Level 1: Recall

Which of the following factors can cause a shift in the supply curve?

• Changes in consumer preferences

• Changes in production technology

• Changes in consumer income

• Changes in the price of substitute goods

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DOK Level 1: Recall

If the price of a good increases, what is the typical response of the quantity supplied, according to the law of supply?

• Quantity supplied decreases

• Quantity supplied increases

• Quantity supplied remains unchanged

• Quantity supplied becomes zero

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DOK Level 1: Recall

How does an increase in consumer income generally affect the demand curve for a normal good?

• The demand curve shifts to the left

• The demand curve shifts to the right

• The demand curve becomes vertical

• The demand curve becomes horizontal

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DOK Level 1: Recall

Which of the following is an example of a factor that affects demand?

• The cost of raw materials

• Consumer tastes and preferences

• The number of suppliers in the market

• The level of technology used in production

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DOK Level 1: Recall

Explain how a decrease in the price of a substitute good affects the demand curve for a product.

• The demand curve shifts to the right

• The demand curve shifts to the left

• The demand curve becomes steeper

• The demand curve becomes flatter

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DOK Level 2: Skill/Concept

Analyze the impact of an improvement in production technology on the supply curve.

• The supply curve shifts to the left

• The supply curve shifts to the right

• The supply curve becomes steeper

• The supply curve becomes flatter

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DOK Level 2: Skill/Concept

What happens to the equilibrium price and quantity when there is an increase in demand, assuming supply remains constant?

• Equilibrium price increases, equilibrium quantity decreases

• Equilibrium price decreases, equilibrium quantity increases

• Equilibrium price increases, equilibrium quantity increases

• Equilibrium price decreases, equilibrium quantity decreases

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DOK Level 2: Skill/Concept

Describe the effect of a government subsidy on the supply curve of a product.

• The supply curve shifts to the left

• The supply curve shifts to the right

• The supply curve becomes steeper

• The supply curve becomes flatter

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DOK Level 2: Skill/Concept

If a new fashion trend increases the popularity of a product, what is the likely effect on the demand curve?

• The demand curve shifts to the left

• The demand curve shifts to the right

• The demand curve becomes steeper

• The demand curve becomes flatter

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DOK Level 2: Skill/Concept