Unit 2: Microecomonics (Supply & Demand)

When there is an increase in demand, what direction does the demand curve shift?

• To the right

• To the left

• Upward

• Downward

What is a change in quantity demanded?

• A shift of the entire demand curve.

• A movement along the demand curve due to a change in the price of the good itself.

• A shift of the supply curve.

• A change in the overall demand for all goods.

What is elastic demand?

• When a large change in price leads to a small change in quantity demanded.

• When a small change in price leads to a large change in quantity demanded.

• When price and quantity demanded are unrelated.

• When demand is constant regardless of price changes.

What is inelastic demand?

• When a large change in price leads to a small change in quantity demanded.

• When a small change in price leads to a large change in quantity demanded.

• When price and quantity demanded are unrelated.

• When demand is constant regardless of price changes.

What are the three determinants of an elastic product?

What is a supply curve?

• A graph showing the relationship between the price of a good and the quantity supplied.

• A graph showing the relationship between the price of a good and the quantity demanded.

• A graph showing the relationship between supply and technological advancements.

• A graph showing consumer preferences and income levels.

What is the law of supply?

• As the price of a good decreases, the quantity supplied increases.

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

• There is no relationship between price and quantity supplied.

• As the price of a good increases, the quantity supplied decreases.

What are the determinants of supply?

• A. Consumer preferences, prices of related goods, and expectations.

• B. Technology, input prices, and expectations.

• C. Consumer income, consumer preferences, and advertising.

• D. Market trends, consumer behavior, and government policies.

When there is a decrease in supply, what direction does the supply curve shift?

• A. To the right

• B. To the left

• C. Upward

• D. Downward

When there is an increase in supply, what direction does the supply curve shift?

• A. To the right

• B. To the left

• C. Upward

• D. Downward