Ch 4,5,6: Supply & Demand (Practice for Economics Final Exam)

What is the Law of Demand?

• A law stating that as a person consumes additional units of a good, the utility gained from each additional unit of the good will eventually decrease.

• A law stating that as the price of a good increases, the quantity demanded of the good decreases, and that as the price of a good decreases, the quantity demanded of the good increases.

Select the definition for "demand curve."

• The graphical representation of the law of demand

• The numerical representation of the law of demand.

What is demand?

• the willingness and ability of buyers to purchase different quantities of a good a different prices during a specific time period

• any place people come together to buy and sell goods and services

Select the TRUE statement.

• The law of demand says that price and quantity demanded move in opposite directions.

• The law of demand says that price and quantity demanded are always the same.

An increase in demand for a good causes the demand curve to shift to the __________.

• right

• left

The willingness and ability of sellers to produce and offer to sell different quantities of a good at different prices during a specific time period is referred to as:

• supply

• demand

As the price of a good increases, the quantity supplied of the good increases, and as the price of a good decreases, the quantity supplied of the good decreases

• entrepreneur

• profit

• law of demand

• law of supply

What is a "subsidy?"

• A financial payment made by the government for a certain action. For example, the government may pay farmers to not grow certain crops.

• a legal limit on the number of units of a foreign-produced good (import) that can enter a country.

The condition in which the quantity supplied of a good is GREATER than the quantity demanded

• surplus

• shortage

• entrepreneur

• equilibrium

The condition in which the quantity demanded of a good is greater than the quantity supplied

• surplus

• shortage

• equilibrium

• profit