Equilibrium Practice (short version)

Match the terms

• Change in quantity supplied

• An increase in demand

• Change in quantity demanded

• A movement along the demand curve

• Change in demand

• An increase in supply

• Shift of the demand curve

• A shift of the demand curve

• Shift of the supply curve

• A movement along the supply curve

Match the terms

• Shift of the demand curve

• An increase in demand

• Expansion or contraction of demand

• A movement along the demand curve

• Expansion or contraction of supply

• A movement along the supply curve

• Shift of the supply curve

• An increase in supply

• Incease or decrease in demand

• A shift of the demand curve

Scenario: A new health study reveals that eating kale significantly reduces the risk of heart disease.
Explanation: The new health study revealing that eating kale significantly reduces the risk of heart disease is a change in ​ (a)   . This is a non-price determinant of demand and will result in a shift of the ​ (b)   to the ​ (c)   . This is an ​ (d)   . The shift creates a ​ (e)   . Due to this, the price will rise. When the price rises, quantity supplied will expand and quantity demanded will contract. The change will result in an overall increase in price and a decrease in quantity traded.

• consumer preferences
• demand curve
• right
• increase in demand
• shortage
• technology advancements
• supply curve
• left
• surplus
• decrease in supply

Scenario: A technological breakthrough allows farmers to produce wheat with 20% less water.
Explanation: The technological breakthrough that allows farmers to produce wheat with 20% less water is a change in production technology. This is a non-price determinant of ​ (a)   and will result in a shift of the supply curve to the ​ (b)   . This is an increase ​ (c)   . The shift creates a ​ (d)   . Due to the surplus, the price will fall. When the price falls, quantity supplied will contract and quantity demanded will expand. The change will result in an overall decrease in price and an ​ (e)   in quantity traded.

• supply
• demand
• right
• left
• in supply
• in quantity supplied
• surplus
• shortage
• increase
• decrease

Scenario: A decrease in the price of electric cars compared to gasoline cars.
Explanation: The decrease in the price of electric cars leading to a drop in demand for gasoline cars is a change in the price of a ​ (a)   . This is a non-price determinant of demand and will result in a shift of the demand curve for gasoline to the ​ (b)   . This is a ​ (c)   in demand. The shift creates a surplus. Due to the surplus, the price will ​ (d)   . When the price changes, quantity supplied will contract and quantity demanded will expand. The change will result in an overall decrease in price and an increase in ​ (e)  

• substitute good
• complementary good
• left
• right
• decrease
• increase
• fall
• rise
• quantity traded.
• quantity