Economics Supply and Demand Unit
While supply is based on the willingness of producers to supply a good or service, demand is MOST LIKELY based on
the price of a good or service; The price of a good or service is the biggest factor listed in determining demand. In economics, the definition of demand is the willingness of a consumer to purchase a product at a given price.
In the market clearing price,
the supply by sellers meets the demand from buyers.
In the graph, what information is determined by looking at the intersection of the supply and demand curves?
equilibrium price;This is the price agreed upon by producers and consumers.
When makers of a product increase their price, consumers are often unwilling to continue to purchase the product (or at least as much of the product). This is known as
the Law of Demand.
What will probably happen when the price of a product goes down?
more people will want that product
If the price for widgets was set at $2.50
producers would discover that the price should be lowered
To have demand, what must you have
the desire and the ability to pay for the item.
Which of these is TRUE of substitute products?
A decrease in the price for one will usually result in a decrease in demand for the other;Substitute products are competitive products, they satisfy the same need, If one product has a more attractive price, consumers will choose to buy it rather than the substitute
Correctly identify the outcome if the price of burritos in Colemanville drops from $7 to $4.
A quantity of 400 additional burritos will be demanded.
What is an unintended consequence when government sets a price control on rental apartments?
Because prices are set below market clearing price, suppliers will rent fewer apartments causing a housing shortage.
What is the role of consumers in determining what is produced in a market economy?
Consumers use their buying power to determine goods produced; The interaction of supply and demand in the market sets equilibrium prices, but consumer sovereignty refers to the ability of consumers to use purchasing choices to impact what is produced.
Income,Consumer Expectations,Population,Consumer Tastes ,Complements and Substitutes would change what part of the market?
Demand
How might a minimum wage law impact the supply and demand of workers?
It might result in a surplus of supply.
How do price controls interfere with the efficient allocation of goods and services in a market economy?
Price controls create artificially high or low prices for goods and services, which in turn cause disequilibrium in the market.
Consumers are told that the consumption of cauliflower will significantly reduce the risk of cancer. Which of these scenarios is likely to happen in the cauliflower market?
The demand curve will shift to the right and the price of cauliflower will rise.
Which statement accurately reflects how the workers' earnings are determined in the graph?
The demand for surgeons is greater than the supply, pushing up wages.
"The 4th of July is here and Grocery Mart is having a sale on All Beef Hot Dogs! The regular price for a package of All Beef Hot Dogs is $5, but the sale price is $2.50!!"What outcome for hot dogs and hot dog buns is most likely based on the information above?
The quantity demanded of hot dogs increases, and the demand for hot dog buns increases.Because hot dogs decreased in price, the law of demand says that the quantity demanded for hot dogs will increase. We have to assume that the price of hot dog buns did not change, as it does not indicate that in the question. But hot dog buns are a complimentary good for hot dogs, so if the quantity demanded increases for hot dogs, people will buy more hot dog buns (at all prices). Therefore, the demand for hot dog buns will increase.
Which relationship is the BEST example of the Law of Supply?
The quantity of a good supplied rises as the price rises.
What is the relationship between quantity supplied and price?
They are directly related.
If the supply of computer engineers increases at the same time that the demand for these workers decreases, what would be the MOST LIKELY effect on wages for these workers?
Wages would decline as the competition for jobs increases.
The purpose of the graph is to show
changes in the demand for a product
Supply is the total amount of a good or service that is available to _____
consumers
Supply is the total amount of a good or service that is available to ______.
consumers
The Law of Demand is one of the most famous laws in economics. It states that when the price of a good rises, the quantity demanded ______________, and when the price of a good falls, the quantity demanded _____________.
falls, rises
demand graph
goes down
supply graph
goes up
In the labor market, the supply curve represents
the supply of workers, and the demand curve is the demand for their labor.
In the labor market, the supply curve represents
the supply of workers, and the demand curve is the demand for their labor; The usual way we think of supply and demand is in the product market where the supply curve represents the firms or industries that produce a product and the demand comes from the consumer that buys the product. In the factor market the firm is buying the labor which is sold by workers.
What would be the situation if the price was moved from p2 to p3?
there would be a shortage of widgets
Which is considered a negative side effect of minimum wage?
unemployment