ECON FLASHCARD 3: Supply and Demand

Front

The law and demand says

Back

the lower the price, the more consumers will buy

Front

A drop in price will

Back

increase the demand for goods

Front

Which of the following describes the substitution effect? Options: as the price of a good falls, people will substitute other products; as the price of a good rises, people will substitute other products; as demand rises, people will substitute other products; as demand falls, people will substitute other products.

Back

as the price of a good rises, people will substitute other products

Front

a demand curve illustrates

Back

the quantities demanded at each price by consumers

Front

A market supply curve shows

Back

the quantity supplied by producers at different prices

Front

Which of these leads to an increase in supply? Options: an increase in the cost of raw materials, a decrease in the cost of raw materials, diminishing marginal returns, a change in the law of supply

Back

a decrease in the cost of raw materials

Front

A subsidy is

Back

a government payment to support a business or market

Front

What curve is this graph showing?

Back

demand

Front

Which curve is this: supply, demand?

Back

supply

Front

Which of the following is an example of shortage? stores cannot sell all the new popular toys they have on hand, manufacturers make too many units of a popular new toy, consumers cannot find enough of a popular new toy in stores, consumers cannot afford to buy a new popular toy

Back

consumers cannot find enough of a popular new toy in stores