Understanding Supply and Demand

Front

What is the law of demand?

Back

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

Front

Example of a factor that can shift the supply curve:

Back

A change in technology

Front

What is the primary difference between a change in quantity demanded and a change in demand?

Back

A change in quantity demanded is a movement along the demand curve, while a change in demand is a shift of the demand curve.

Front

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

Back

The supply curve shifts to the right.

Front

Which of the following best describes the concept of elasticity in economics?

Back

The responsiveness of quantity demanded or supplied to changes in price

Front

What is the effect of an increase in the cost of raw materials on the supply curve?

Back

The supply curve shifts to the left.

Front

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

Back

Demand for the original good will increase.

Front

Which scenario would likely cause a decrease in the demand for a product?

Back

A decrease in consumer income for a normal good

Front

If a product has an elastic demand, what happens to total revenue when the price decreases?

Back

Total revenue increases.

Front

What is the effect of a government-imposed price floor on the market equilibrium?

Back

A price floor set above equilibrium price causes a surplus.