Economics Study Guide Supply, Demand, and Circular Flow

Point B is where revenue is received. What does it represent?

• Product Market

• Factor Market

• Individuals

• Businesses

What does point A show on the Circular flow diagram? (Where households spend money and businesses get revenue)

• Households

• Businesses

• Factor Market

• Product Market

What does point C show on the Circular Flow diagram? (Households earn income here)

• Firm

• Factor Market

• Individual

• Product Market

In the circular flow diagram below, which numbers show money exchanged for goods/services to consumers?

• 1 and 2

• 3 and 4

• 5 and 6

• 7 and 8

If a price is above equilibrium, it creates a...

• shortage

• surplus

• market price

• demand

If a price is below equilibrium, it creates a...

• shortage

• surplus 

• market price 

• supply

What does this curve show?

• demand

• supply

• equilibrium

• shortage

What does this curve show?

• supply

• equilibrium

• demand

• surplus

Which group determines SUPPLY in the market?

• buyers

• sellers

• consumers

• us

Which group determines DEMAND in the market?

• buyers

• sellers

• suppliers

• store owners