The model of supply and demand predicts that

Prices will move to match buyers and sellers

A product is said to have an "elastic" demand curve when

Price, lower or higher, has a large effect on demand

Suppliers (sellers) often reduce prices because they

have a surplus of products to sell

What two factors are necessary for demand?

desire for a good or service and the ability to pay for it

A product is said to have an "inelastic" supply curve when

Price, lower or higher, has little effect on supply

A product is said to have an "elastic" supply curve when

Price, lower or higher, has a large effect on supply

A product is said to have an "inelastic" demand curve when

Price, lower or higher, has little effect on demand

A market demand curve shows how much

of a product a market is willing and able to buy

When there is a shortage, producers raise prices in an attempt to

equalize the quantity supplied and demanded

While not a perfect model, supply, demand, and equilibrium prices DOES describe

How buyers make decisions at different prices

Higher prices generally

motivate producers/sellers to enter a market

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Quick Check: Supply & Demand

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Let's begin by reviewing the heart of last week's lessons -- supply & demand curves and equilibrium prices. #supply #demand #equilibrium #economics

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Questions 20

Answers

1
The model of supply and demand predicts that
Buyers will not choose to leave markets
Prices will move to match buyers and sellers
Quantity does not vary to match buyers and sellers
Sellers will not choose to leave markets
2
A product is said to have an "elastic" demand curve when
Price, lower or higher, has little effect on supply
Price, lower or higher, has a large effect on demand
Price, lower or higher, has a large effect on supply
Price, lower or higher, has little effect on demand
3
Which concept is defined as the measure of how responsive consumers are to price change?
elasticity of demand
shortage/surplus
consumer taste
consumer expectation
4
Suppliers (sellers) often reduce prices because they
have a surplus of products to sell
want to decrease consumer demand
want to increase the product supply
have a shortage of products to sell
5
An actress starts a craze for wearing camouflage. What factor is affecting demand?
substitutes
complements
consumer expectations
consumer taste
6
What two factors are necessary for demand?
availability of a good/service and the ability to pay for it
familiarity with a good/service and the desire to pay for it
desire for a good or service and the ability to pay for it
desire for a good or service and its availability
7
A product is said to have an "inelastic" supply curve when
Price, lower or higher, has a large effect on demand
Price, lower or higher, has a large effect on supply
Price, lower or higher, has little effect on demand
Price, lower or higher, has little effect on supply
8
If we are talking a "normal" product and we have too much to sell (SURPLUS) we should:
Raise price
Raise AND lower price
Raise OR lower price
Lower price
9
Lower prices generally
motivate producers/sellers to enter a market
motivate consumers to buy
discourage producers/sellers from leaving a market
discourage consumers from buying
10
According to our supply model, when prices increases,
quantity supplied increases
quantity demanded increases
supply increases or decreases
demand increases or decreases
11
A product is said to have an "elastic" supply curve when
Price, lower or higher, has a large effect on demand
Price, lower or higher, has a large effect on supply
Price, lower or higher, has little effect on supply
Price, lower or higher, has little effect on demand
12
A product is said to have an "inelastic" demand curve when
Price, lower or higher, has a large effect on demand
Price, lower or higher, has little effect on demand
Price, lower or higher, has little effect on supply
Price, lower or higher, has a large effect on supply
13
A market demand curve shows how much
of a product a market is willing and able to buy
of a product an individual is willing and able to buy
14
The change in the amount consumers will buy because they can buy a different product instead
income effect
inferior goods
normal goods
substitution effect
15
Our supply & demand model predicts an equilibrium where
Supply > Demand
Supply X Demand
Supply = Demand
Supply < Demand
16
What term is defined as goods that consumers demand more of when their incomes rise?
complementary goods
substitute goods
normal goods
inferior goods
17
When there is a shortage, producers raise prices in an attempt to
lower the quantity supplied
equalize the quantity supplied and demanded
separate the quantity supplied and demanded
raise the quantity demanded
18
While not a perfect model, supply, demand, and equilibrium prices DOES describe
How sellers make decisions at different prices
How buyers make decisions at different prices
how there can only be one price that works for a business
How buyers and sellers make decisions at different prices
19
If we are talking a "normal" product and we have not enough to sell (SHORTAGE) we should:
Raise price
Lower price
Raise AND lower price
Raise OR lower price
20
Higher prices generally
motivate producers/sellers to enter a market
discourage consumers/buyers from seeking a substitute
discourage producer/sellers from entering a market
motivate consumers to buy

Quick Check: Supply & Demand Flashcards | StudBud