If you see a steep demand curve, you know that demand for the good is INELASTIC because

consumers will KEEP buying it, even if the price goes up

How do you calculate the size of a shortage or surplus?

Subtract QS and QD at a given price.

A shortage occurs when

Q demanded is GREATER than than Q supplied

Which of the following is NOT a key economic question?

How will it be ensured that goods and services are paid for?

The purpose of an economic system is to

manage scarce resources in order to produce goods/services

A surplus occurs when

Q supplied is GREATER than Q demanded

If you wanted to find the equilibrium price for a good by looking at its Supply/Demand Schedule,

look for the price at which Q demanded equals Q supplied

What is the law of demand?

When a good’s price is lower, people will demand more of it.

The best example of the law of supply is when a coffee shop

produces more coffee when the price of coffee goes up.

In a market economy, price is determined by:

the interaction of supply and demand

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Supply and Demand

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Questions 19

Answers

1
Which of the following is NOT characteristic of a command economy?
equal distribution of resources
government price controls
equal access to goods/services
consumer choice
2
Which are complimentary goods?
honey buns and Little Debbie's
Nike and Adidas
peanut butter and jelly
water and Gatorade
3
This will cause the equilibrium price of eggs to increase
True
False
4
If you see a steep demand curve, you know that demand for the good is INELASTIC because
consumers will KEEP buying it, even if the price goes up
consumers will STOP buying it when the price goes down
consumers will buy more if the price goes up
consumers will STOP buying it when the price goes up
5
How do you calculate the size of a shortage or surplus?
Divide QS by QD.
Multiply QS and QD.
Subtract QS and QD at a given price.
Add QS and QD at a given price.
6
When drawing a supply and demand graph, label your Y axis ___ and your X axis _____
Q, P
P, Q
S, D
D, S
7
A shortage occurs when
Q supplied is GREATER than Q demanded
Q demanded is GREATER than than Q supplied
Q supplied is EQUAL TO Q demanded
8
If consumers expect prices to go up in the future, what happens to their short-term demand?
it goes down
it stays the same
it goes up
consumer expectations do not affect prices
9
When the price of Gatorade rises, the demand for Powerade will probably rise, because they are:
luxury goods
compliments
normal goods
substitutes
10
An example of a price ceiling in the U.S. is
Buy one get one free
Rent Control in NYC
Black Friday Sales
Minimum Wage
11
Which of the following is NOT a key economic question?
How will it be ensured that goods and services are paid for?
How should goods/services be produced?
What goods/services should be produced?
For whom should these goods and services be produced?
12
The purpose of an economic system is to
give all producers the same access to consumers
make sure people are paid for their labor
make sure all people have equal access to goods
manage scarce resources in order to produce goods/services
13
A surplus occurs when
Q supplied is EQUAL TO Q demanded
Q supplied is GREATER than Q demanded
Q supplied is LESS than than Q demanded
14
If you wanted to find the equilibrium price for a good by looking at its Supply/Demand Schedule,
look for the price at which Q demanded equals Q supplied
look for the highest possible price
look for lowest possible price
15
The point at which consumers will buy exactly the same amount as is produced is called
surplus
shortage
price floor
equilibrium
16
If quantity demanded for eggs goes up at every price level, the demand curve will shift
up
right
left
down
17
What is the law of demand?
The higher the price, the more people will want the good.
Services are of interest in the same way that goods are.
Everyone has a limited income that they will spend.
When a good’s price is lower, people will demand more of it.
18
The best example of the law of supply is when a coffee shop
supplies more coffee when they hire more employees.
produces more coffee when the price of coffee goes up.
buys a new dishwasher to make work easier.
produces more coffee when the price of coffee falls.
19
In a market economy, price is determined by:
the government
the interaction of supply and demand
the suppliers
the consumer’s perception of necessity

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