How the Market Works

In general, if the price of good or service goes up, what happens to the demand for it?

• Demand goes up

• Demand stays the same

• Demand goes down

• None of them

In general, if the price of a good or service goes down, what happens to the demand for it?

• Demand goes up

• Demand stays the same

• Demand goes down

• None of them

The desire to have some good or service and the ability to pay for it

• supply

• equilibrium

• demand

• quantity demanded

Which of these best describes the law of demand?

• if prices go up, quantity demanded will fall and if prices go down, quantity demanded will go up

• if prices go up, quantity demanded will also go up and if prices go down, quantity demanded will also go down

• there is no law of demand, each situation is unique and demand and prices cannot be predicted

• prices will go up for certain goods when quantity demanded goes up and vice versa

If the price of Frozen Yogurt increased then the demand for ice cream will 

• increase
• decrease

The downward slope of a demand curve

• represents the law of demand
• shows that as the price of a good rises, consumers increase the quantity they demand
• indicates how the quantity demanded changes when incomes rise and the good is a normal good
• indicates how demand changes when incomes rise and the good is a normal good

How is a decrease in the price of a good illustrated on a demand graph?

• The demand curve shifts to the right.

• The demand curve shifts to the left

• There is upward movement along the demand curve

• There is downward movement along the demand curve.

What is the relationship between the Price and Quantity Demanded?

• Positive Relationship

• Direct Relationship

• Inverse Relationship

• Mixed Relationship

Suppliers will normally offer more for sale at high prices and less for sale at lower prices

• Quantity supplied

• Law of Supply

• total production

• short run

The willingness and ability of a producer to make a product is referred to as

• quantity supplied

• quantity demanded

• supply

• demand