Economic Systems and Supply & Demand Review

What is Demand?

• the amount of a good or service that consumers are willing to buy

• the amount of good or a service that producers are willing to sell

• The price of a good or service for the consumer

• The price of a good or service for the producer

What is the Law of Demand?

• As the price increases the quantity demanded increases too

• As the demand of a good goes up the price goes down

• As the supply of a good goes up the demand goes down

• As the price increases the quantity demanded decreases

What is the Law of Diminishing Returns?

• The more you consume of something, the less satisfying it is per unit

• Consumers only have so much money they don't want to spend

• There are always cheaper alternative products consumers can buy

• None of the following answer choices are true

What is the Substitution Effect?

• The more you consume of something, the less satisfying it is per unit

• Consumers only have so much money they don't want to spend

• There are always cheaper alternative products consumers can buy

• None of the following answer choices are true

What is the Income Effect?

• The more you consume of something, the less satisfying it is per unit

• Consumers only have so much money they don't want to spend

• There are always cheaper alternative products consumers can buy

• None of the following answer choices are true

What is Supply?

• the amount of a good or service that consumers are willing to buy

• the amount of good or a service that producers are willing to sell

• The price of a good or service for the consumer

• The price of a good or service for the producer

What is the Law of Supply?

• As the price increases the quantity produced increases too

• As the demand of a good goes up the price goes down

• As the supply of a good goes up the demand goes down

• As the price increases the quantity demanded decreases

What is Revenue and why does it explain the Law of Supply?

• Revenue is the profit a firm makes

• Revenue is the quantity a firm supplies

• Firms will make more products in order to maximize profits

• Firms will make few products to increase the demand

• All of the following answers are true

Which of the following is true about Market Entries?

• When the price of a good goes up, new firms will enter the market

• When the price of a good goes down, new firms will enter the market

• The quantity of products supplied will increase because of Market Entries

• The quantity of products supplied will go down because of Market Entries

What is Equilibrium?

• The point where supply and demand are balanced

• The point where producers are satisfied with the profit

• The point where consumers are satisfied with the price

• All of the following answers are true