Economics Basics

What is the Law of Demand?

• The Law of Demand states that as the price of a good or service increases, the quantity demanded for that good or service increases as well.

• The Law of Demand states that as the price of a good or service decreases, the quantity demanded for that good or service decreases as well.

• The Law of Demand states that the quantity demanded for a good or service remains constant regardless of price changes.

• The Law of Demand states that as the price of a good or service decreases, the quantity demanded for that good or service increases, and vice versa, assuming all other factors remain constant.

Explain the Law of Supply.

• The Law of Supply states that as the price of a good or service increases, the quantity supplied by producers also increases.

• The Law of Supply states that as the price of a good or service remains constant, the quantity supplied by producers fluctuates.

• The Law of Supply states that as the price of a good or service increases, the quantity demanded by consumers decreases.

• The Law of Supply states that as the price of a good or service decreases, the quantity supplied by producers increases.

Define Market Equilibrium.

• Market equilibrium is a state where the supply of a product is equal to the demand for that product, resulting in stable prices.

• Market equilibrium is when demand exceeds supply resulting in high prices.

• Market equilibrium is when supply exceeds demand resulting in low prices.

• Market equilibrium is when prices fluctuate constantly due to changing supply and demand.

Name one factor that affects demand.

• Weather conditions

• Number of competitors

• Price of the product

• Time of day

Name one factor that affects supply.

• Consumer preferences

• Weather conditions

• Demand

• Cost of production

What are Adam Smith's contributions to Economics?

• Law of supply and demand

• Concept of the invisible hand, division of labor, and free markets regulating themselves

• Communism

• Theory of relativity

How does price affect demand?

• Price and demand have a direct relationship.

• Price has no impact on demand.

• Price only affects supply, not demand.

• Price and demand have an inverse relationship.

How does technology impact supply?

• Technology has no impact on supply

• Technology decreases supply by increasing costs

• Technology impacts supply by increasing efficiency in production processes, reducing costs, improving communication and coordination in supply chains, enabling real-time data analysis for better decision-making, and expanding market reach through e-commerce platforms.

• Technology impacts supply by reducing demand

What happens when demand exceeds supply?

• Surplus is created

• Equilibrium is reached

• Prices decrease

• Shortage occurs

How does competition affect market equilibrium?

• Competition can lead to lower prices and higher quantities if it increases, or higher prices and lower quantities if it decreases.

• Competition has no impact on market equilibrium

• Competition always leads to higher prices and lower quantities

• Competition results in a fixed equilibrium point