Supply and Demand Practice Test
What factor has eliminated the supply of certain products?
Technology
What three factors affect a product's elasticity?
availability of other products, e.g., luxuries not necessary to survive; availability of substitute products; and amount of consumer income available to spend.
The best time for consumers to purchase products at reduced prices is when a(n) __________ market exists.
buyers
The factor affecting demand that involves the amount of money available to spend is known as
buying power
Some products are used together, so the demand for the main product influences the demand for the
complementary product
Name six factors that affect supply.
cost of production number of producers future prices disasters and emergencies government technology.
The quantity of a good or service that consumers are ready to buy at a given price at a particular time is known as
demand.
Name three factors necessary for demand to exist
desire for a product; buying power to pay for the product; and willingness to exchange buying power
If the demand for products changes in relation to changes in price, __________ demand exists.
elastic
An indication of how changes in price will affect changes in the amounts demanded and supplied is known as
elasticity
If the demand for a good or service is constant regardless of its price, __________ demand exists
inelastic
The economic principle which states that the quantity of a good or service that consumers will buy varies inversely with the price of the good or service is known as
law of demand
An economic principle that states that the quantity of a good or service that will be offered for sale varies in direct relation to its selling price is known as the
law of supply
The concept that the supply of a good or service will increase when the demand is great and decrease when demand is low is known as the
law of supply and demand
When the demand is so great that customers will buy regardless of high prices, a(n) __________ market exists.
seller's
The quantity of a good or service that producers are able and willing to offer for sale at a specified price in a given period of time is known as
supply
How do consumer expectations affect demand?
they often wait to buy if they think prices will drop and they will get a bargain later
A product will be in demand if it provides _________ to the potential customer.
utility