Crash Course Economics 4

What is the key to markets?

• voluntary exchange

• corporate taxes

• government control

• sales tax

How do markets use price signals?

• to guide distribution of resources

• to purchase more capital

• to raise prices and help the consumer

• to avoid government regulation

What does the Law of Demand state?

• when the price goes up, people buy less; when the price goes down, people buy more.

• when the price goes up, people want it more; when the price goes down, people think it is a cheap product

• when the price goes up, the government needs to intervene; when the price goes down, government needs to intervene

How does surplus affect price?

• lowers price

• stabilizes price

• raises price

• government will set the price

How does shortage affect price?

• raises price

• lowers price

• stabilizes price

• government intervenes to set price

What is equilibrium price?

• the ideal price where supply equals demand

• the ideal price to maximize profit for a company

• the ideal price to help the consumer afford a product

What is point "A" suppose to be labelled?

• price

• quantity

• supply

• demand

What is point "B" suppose to be labelled?

• quantity

• supply

• demand

• price

What is point "C" suppose to be labelled?

• quantity

• supply

• demand

• price

What is point "D" suppose to be labelled?

• quantity

• supply

• demand

• price