CSmith Economics Unit 2: Supply and Demand

The curve pictured represents...

• The total supply of a good in the market

• The total demand of a good in the market

• Prices at any point in the market

• Consumer expectations in the market

According to the Law of Demand, if price goes up, what happens to demand?

• Supply increases

• Demand decreases

• Supply decreases

• Incomes rise

Which of the following describes an increase in demand due to a natural disaster?

• A hurricane in forecasted, so people move out of Florida

• There is expected to be a war in Russia, so weapons makers increase production

• Wildfires are spreading in California, so more consumers want fire insurance

• A tsunami is predicted to hit the coast, so construction is halted

The price of steak goes up, so the demand for hamburger increases. Hamburger is the _________ good here.

• Luxury

• Popular

• Substitute

• Complementary

The price of hotdogs increases, so the demand for hotdog buns decreases. What type of goods are these two items?

• Complementary

• Luxury

• Inferior

• Superior

A shift to the right, for either supply or demand, indicates what?

• An increase

• A decrease

• No change

• A change in price

A natural disaster would result in a

• Supply curve shift to the left

• Supply curve shift to the right

• No shift

• movement up the supply line

Which of the following describes the Income Effect when dealing with demand in Economics?

• The price of hotdogs goes up, so demand for hotdog buns decreases

• The price of tea increases, so demand for coffee increases

• An item goes on sale, so demand increases

• The price of ammo increases after WWIII starts

Which of the following correctly describes quantity supplied (Qs) in Economics?

• The amount of something people want

• The amount available for sale of any good or service

• The amount of a product or service sold

• The value placed on an item by supply and demand forces in a market

Which of the following describes the relationship between Price and Quantity Supplied (Qs) according to the Law of Supply?

• Price goes up, so Supply stays the same

• Price drops, so Supply increases

• Price for one item increases, so Demand for that item decrease

• If Price changes, Supply will change in the same direction