Unit 1 Chapter 3 Quiz Supply and Demand

Andy views beer and pizza as complements to one another. If the price of pizza decreases, economists would expect:

Andy's demand for beer to increase

The demand curve shifts to the left

Demand goes down

The demand curve shifts to the right

Demand goes up

What items could cause equilibrium quantity to go up

Demand goes up Supply goes up

The information that markets generate to guide the distribution of resources is called:

Price Signals

There is a movement up the demand curve

Quantity demanded goes down

There is a movement down the demand curve

Quantity demanded goes up

The demand curve has a negative slope

True

What is the definition of a shortage

When quantity demanded is greater than quantity supplied

Economists refer to the relationship that a higher price leads to a lower quantity demanded as the _____________.

law of demand

When economists talk about supply, they are referring to a relationship between price received for each unit sold and the _________________.

quantity supplied

If the price is below the equilibrium level, then the quantity demanded will exceed the quantity supplied. This is known as ___________________

shortage or excess demand

A drought decreases the supply of agricultural products, which means that at any given price a lower quantity will be supplied; conversely, especially good weather would shift the __________________ .

supply curve to the right