Supply & Demand

A _________ is a graph that shows the amount of a product that would be bought at all prices in the market.

• supply curve

• law of demand

• demand curve

• market demand

Some products, such as DVD players and DVDs, are called ________ because demand for one moves in the opposite direction as the price of the other.

• substitutes

• surplus

• elastic

• complements

The methods or processes used to make goods and services are called ________.

• factors

• technology

• resources

• production

At the _________ price there is neither a surplus nor a shortage.

• profitable

• ceiling

• exchange

• equilibrium

According to the law of demand, quantity demanded and price _______.

• move in the same direction

• depend on marginal utility

• move in opposite directions

• are not related

Diminishing marginal utility is the explanation for the consumer's decision to __________.

• spend less money for sale items

• buy only one dessert with a meal

• purchase more video games

• buy expensive gifts for close friends

Total demand may change if more consumers enter the market, consumer tastes change, or __________.

• consumer expectations change

• substitutes become popular

• demand is inelastic

• supply remains the same

Businesses invest time, money, and other capital resources for the primary motive of __________.

• paying good wages

• supplying better products

• making a profit

• satisfying customers' needs

One of the strengths of a market economy is that __________.

• prices absorb some of the shocks or unexpected changes in the economy

• most consumers can afford plenty of the goods and services they want

• producers almost always make a profit

• demand is never greater than supply

If the amount by which the quantity supplied is higher than the quantity demanded there is a __________.

• surplus

• shortage

• equilibrium

• price ceiling