Changes in Supply & Demand

Match the following determinants of demand

• Tastes

• Buyers preparing for a future event

• Market Size

• Complimentary & Substitute Goods

• Income

• Amount of money consumers have to spend

• Expectations

• Amount of buyers in the market

• Related Prices

• Influence & popularity of products

Match the following determinants of supply

• Competition

• Suppliers preparing for a future event

• Input Prices

• Updated or new machinery or tools

• Technology

• #of sellers producing product

• Related Prices

• Cost of production factors to make products

• Expectations

• Complimentary & Substitute Goods

True or False: NO MATTER WHAT if you INCREASE Demand or Supply it is a shift to the RIGHT

• True

• False

True or False: NO MATTER WHAT if you DECREASE Demand or Supply it is a shift to the LEFT

• True

• False

What is a substitute?

• Use in place of something similar quality

• The opposite of another good

• Use an exact replica of the same good

What is a complimentary good?

• A good you would use to enjoy another good

• The opposite of another good

• Use an exact replica of the same good

Consumer get a tax cut. What happens in the market for TVS? What's the determinant?

• Demand Increases due to changes in INCOME

• Supply Increases due to changes in TECHNOLOGY

• Supply Increases due to changes in COMPETITION

• Demand Decreases due to changes in MARKET SIZE.

• Demand Decreases due to changes in INCOME

Consumer get a tax cut. Graph market for TVS

Answer explanation

This is an increase in Demand, due to a change in consumers INCOME. A tax cut means consumers have more money to spend.

Toyota opens a new factory. What happens in the Car Market? What's the determinant?

• Supply Decreases due to changes in TECHNOLOGY

• Supply Increases due to changes in TECHNOLOGY

• Supply Increases due to changes in COMPETITION

• Demand Decreases due to changes in MARKET SIZE.

• Supply Decreases due to changes in INPUT COSTS

Toyota opens a new factory. Graph Car Market

Answer explanation

This is an increase in supply due to an increase in (t)echnology