AP ECON : LAW OF S/D

change in quantity demand/supplied is ...

a movement along a fixed demand curve due to price changes (an increase or decrease in price)

change of demand/supply is ...

a shift in entire demand/supply curve

a decrease in supply means ... a. a shift to the left of the entire supply curve b. a shift to the left of the entire demand curve c. moving downward (to the left) along the supply curve with lower prices d. more will be supplied at every price e. less will be demanded at every price

a. a shift to the left of the entire supply curve when supply decrease, curve shifts to the left

law of demand

an inverse relationship between price of a product and the quantity demanded (as price increases, the quantity decreases and vis versa)

which of the following best describes the typical upward sloping shape of supply curves? a. as the price of corn ethanol rises, farmers plant more acres of soybeans b. as the price of cattle falls, ranchers are less willing to sell their cattle at livestock auctions and vv c. As taxes on cigarettes rise, more cigarette smokers decide to quit smoking d. As the technology used in producing video games increases, more video games are produced at each and every price. e. as the tax subsidy on health insurance for families increases, more families can afford to purchase health insurance.

b. as the price of cattle falls, ranchers are less willing to sell their cattle at livestock auctions and vv producers won't gain profit if selling cows for a low price

a decrease in the price of eggs will result in a ... a. greater quantity of eggs supplied b. greater quantity of eggs demanded c. decrease in demand for eggs d. increase in supply of eggs e. increase in demand for eggs

b. greater quantity of eggs demanded the law of demand states there is an inverse relationship btwn price and demand.

when the price of corn is falling, we would expect ... a. the demand for corn to be shifting inward b. the quantity supplied of corn to be decreasing c. the quantity demanded for corn to be falling d. the supply of corn to be shifting inward e. the supply of corn to be shifting outward.

b. the quantity supplied of corn to be decreasing PRICE = Qs, direct relationship

which of the following factors cause a movement along the demand curve for good x? a. both a change in price of good x and change in population b. change in population c. change in the price of good x d. change in popularity of good x e. change in the price of related good y

c. change in the price of good x all other options are reasons for change in demand (shift of entire curve) while c will only cause movement along fixed demand curve

when the price of lamps increases, the: a. supply decreases b. supply increases c. quantity supplied increases d. quantity supplied decreases e. quantity demanded increases.

c. quantity supplied increases price has direct relationship w quantity supplied

the demand for a good will increases if a. there is a decrease in the price of the good b. there is an increase in the number of sellers in this market c. there is an increase in the number of consumers in this market d. the price of inputs needed in the production of the good decrease e. the price of a complementary good icnreases

c. there is an increase in the number of consumers in this market price = Qd, sellers = supply, inputs = supply, demand for complements increases when price in one good increases

which of the following best describes the law of demand? a. when scientists warn that chocolate can give a person stomach ulcers, elaine buys fewer chocolate bars each month. b. when elaine's income rises, she buys fewer chocolate bars each month. c. when the price of chocolate bars rises, elaine buys fewer chocolate bars each month. d. when the price of strawberries falls, elaine buys more chocolate bars each month. e. when the price of peanut butter cups rises, Elaine buys more chocolate bars each month.

c. when the price of chocolate bars rises, elaine buys fewer chocolate bars each month. law of demand shows relationship (inverse) between price and Qd

what causes change in supply?

cost of inputs (labor, resources, etc.), productivity, technology, sellers expectations, # of producers, gov't policies (taxes, subsidies), and gov't regulation

the ___ apples will decrease due to higher apple prices a. demand for b. tastes and preferences for c. supply for d. quantity demanded for e. equilibrium for

d. quantity demanded for quantity demanded is changed by price inc/dec. supply increases when prices increases.

law of supply

direct relationship between price and quantity supplied (as price increases, the quantity supplied increases and vis versa)

a decrease in the price of a good will result in: a. a rightward shift of the demand curve b. an increase in demand c. more being supplied d. an increase in supply e. an increase in the quantity demanded

e. an increase in the quantity demanded quantity demanded is only changed by a price inc/dec. supply decrease when price decreases

expectations

if $ of good increase in the future, current demand increases if $ of good decreases in future, current demand decreases

what causes change of demand?

income, population, tastes/preferences, # of consumers, expectations, $ of substitute goods, and $ of complementary goods

complementary goods

products and services that are used together. when the $ of one increases, the demand for the other increases (vis versa).

substitute goods

products/services that can be used in replacement of each other. when the $ of one increases, the demand for other increases (vis versa).

quantity demanded

the quantity that buyers are willing and able to purchase at specific price

inferior good (income)

when income increases, demand for good decreases when income decreases, demand for good increases

normal good (income)

when income increases, demand for good increases when income decreases, demand for good decreases