Understanding Supply and Demand Concepts

Front

What does the law of supply state?

Back

As the price of a good increases, the quantity supplied increases.

Front

What does the law of demand state?

Back

As the price of a good increases, the quantity demanded decreases.

Front

Which of the following is a determinant of supply? Consumer preferences, Number of sellers, Income of consumers, Price of substitutes

Back

Number of sellers

Front

Which of the following is a determinant of demand? Technology, Cost of production, Consumer income, Number of producers

Back

Consumer income

Front

How does an increase in consumer income affect the demand curve for a normal good?

Back

The demand curve shifts to the right.

Front

What happens to the supply curve when there is an improvement in technology?

Back

The supply curve shifts to the right.

Front

If the price of a substitute good increases, what is likely to happen to the demand for the original good?

Back

Demand increases.

Front

What effect does an increase in the number of sellers have on the market supply curve?

Back

The supply curve shifts to the right.

Front

Which of the following would cause a movement along the demand curve rather than a shift? A change in consumer income, A change in the price of the good, A change in consumer preferences, A change in the price of a substitute

Back

A change in the price of the good

Front

What is the result of a simultaneous increase in both demand and supply?

Back

Equilibrium price is indeterminate, equilibrium quantity increases.