Supply and Demand

What is a market?

• Place where goods are produced

• Government institution

• Group of buyers and sellers of a specific good

• Taxation system

Which of the following statements describes the law of demand?

• Demand is always constant

• Price does not affect demand

• As price increases, the quantity demanded decreases

• As price increases, the quantity demanded increases

What happens when the price of a good is below the equilibrium price?

• There is a surplus of the good

• There is a shortage of the good

• The market is in equilibrium

• The price remains unchanged

What is the demand curve?

• List of all goods in the market

• Graph showing the relationship between price and quantity of goods supplied

• Graph showing the relationship between price and quantity of demand

• Price table for goods

Which of the following statements is true for a competitive market?

• Each buyer can influence the price

• Each seller can influence the price

• No buyer or seller can influence the price

• Prices are set by the government

What happens when the demand curve shifts to the right?

• The price of the good remains unchanged

• The demand for the good decreases

• The quantity of the good does not change

• The demand for the good increases

Which of the following statements describes normal goods?

• The demand for them does not depend on income

• The demand for them decreases when income falls

• They are always cheaper than other goods

• The demand for them increases when income falls

What is the supply curve?

• List of all goods in the market

• Graph showing the relationship between price and the quantity of goods supplied

• Price table for goods

• Graph showing the relationship between price and the quantity demanded

Which of the following events will lead to a leftward shift of the supply curve?

• Increase in technology

• Increase in raw material prices

• Increase in the number of sellers

• Decrease in raw material prices

What happens when the price of a good increases?

• Quantity supplied remains unchanged

• Quantity supplied decreases

• Quantity demanded decreases

• Quantity demanded increases