Unit 2: Supply & Demand

When supply shifts to the left, what happens to market price and quantity?

According to the law of supply, as prices fall

According to the law of demand, as price rises

When the supply curve shifts right, what happens to market price and quantity?

In the market for chocolate, disease in cocoa trees reduces the size of the harvest

In the market for wheat, new technology improves farming and harvesting techniques

In the market for new homes, consumer incomes rise

Which of the following is true about the market clearing (equilibrium) price?

A price ceiling must be placed ______ equilibrium in order to change the market

Is the image in the graph a price ceiling or a price floor?

At any price above the equilibrium price

At a price floor, the market condition that results is called a(n)

In the market for car tires, the cost producers pay for rubber and steel belting rises

An increase in demand will cause the equilibrium price to

When demand increases, the demand curve shifts

In the market for soda, consumers cut back on drinking sugary drinks

What is the best explanation for the change you see in the supply curve?

T or F: when a price floor is imposed, QS will be less than it was at the EQ price

If the demand curve shifts left, what will happen to the market price and quantity?

Is the following graph showing a price ceiling or price floor?

Which of the following might have caused the demand curve to shift right?

If consumer income rises, how would the demand curve change?

A decrease in supply will cause the equilibrium price to

T or F: when a price ceiling is put in place QD will be higher than it was at the EQ price

When supply decreases the supply curve shifts