Unit 2 Law of Supply/Demand & Price System

Replacing a good with a similar good because of a change in prices is an example of the _____.

When the price of a product goes down, what happens ?

This occurs in the market when the price is less than the equilibrium price.

Gilda owns a store. When decreasing prices causes her to cut costs, the first thing she does is

This occurs when the price increase has little effect on demand.

An increase in the population of the City of Alexandria will cause the demand curve to shift to the

Rent control is an example of

This is known as the sweet spot in the market economy.

How is profit determined?

If prices rise and income stays the same, what is the effect on demand?

How is the total cost of a factory or other production site determined?

John gets a raise. He starts to buy enriched pasta instead of cheaper pasta. The cheaper pasta is an

Ultimately, the main factor that drives decisions about production is the

People will buy more of a good when its price falls and less when its price rises, is called?

A consumer’s desire to buy something and the ability to pay for it is called _____.

Which good is supply likely to be inelastic in the short term, whether prices rise or fall?

A graph that shows how demand will change when prices change is a _____.

When government intervention causes the supply of a good to rise, the supply curve shifts.

What causes a shift in the demand curve?

Which is an example of the law of demand at work?