Supply and Demand Review

What does it mean when an economist says that a consumer has demand for a good or service?

• 1. able but unwilling

• 1. wants it but cannot afford it

• 1. unable and unwilling

• 1. willing and able

Where supply = demand

• Equilibrium

• Shortage

• Surplus

• Idk

 If there is a decrease in price, what happens to demand?

• Increase

• Decrease

• Remain the same

• none

If taxes go up, what will most likely happen to the supply of goods?

• Inrease

• Decrease

• Remain the same

• I am hungry

Which of the following causes the supply curve of paper (which is made from trees) to shift to the left?

• 1. Paper producers expect lower paper prices in the months ahead.

• 1. The price of pencils, a complement to paper, increases.

• 1. Environmental concerns reduce the yearly amount of timber

• 1. Improvements in the technology used to produce paper.

Which of the below is an example of compliments?

• 1. The price of milk goes down so demand increases

• 1. An increase in the price for apples will cause a demand for oranges 

• 1. Computers sell quicker than cell phones

• 1. When buying bagels you also buy cream cheese

A price ceiling is characterized by

• 1. a price set below the current (or equilibrium) market price of the good.

• 1. a price set above the current (or equilibrium) market price of the good.

• 1. a shift in the demand curve.

• 2. a shift in the supply curve

Which of the below is an example of substitution effect?

• 1. When Joe buys Oreos he also buys milk

• 1. Sam’s income increased so she will buy normal goods

• 1. There was an increase in price for onion rings so Ben bought fries instead

• 1. Lobster is expensive

When there is a surplus,

• 1. producers raise prices until supply and demand are balanced

• 1. prices tend to fall until equilibrium is reached

• 1. producers advertise to increase demand at higher prices

• 2. supply decreases at every price

Which of the following is an example of a price floor?

• 1. limiting ticket prices   

• 1. setting a minimum wage

• 1. rationing tires  

• 1. establishing rent control