GNEC115 Recap 3 &4

Households determine the supply (SS) for goods and services.

• True

• False

Answer explanation

Households determine the demand (DD) for goods and services.

In the goods markets, firms determine the supply (SS).

• True

• False

Supply is the quantity of a good or service that buyers are willing and able to buy.

• False

• True

Answer explanation

Demand is the quantity of a good or service that buyers are willing and able to buy.

Capital and entrepreneurship are________ because they are created by people to help make goods and services.

• secondary factors

• primary factors

Labour and land (natural resources) are called _______ because they are basic, natural resources needed for production.

• primary factors

• secondary

The __________ is where all finished goods and services are bought and sold in an economy.

• goods market

• factor market

This shows how the quantity demanded changes as the price of a good changes.

• Movement along the curve.

• Shift in the curve.

If the price of a substitute increases, the demand for the other good will increase.

• True

• False

If the price of bread goes down, more people might buy margarine too.

• True

• False

Answer explanation

If the price of one good decreases, the demand for that good increases, and the demand for the complementary good also increases.

When more buyers want to buy than what is being supplied at a certain price, this market condition is known as__.

• Excess demand

• Excess Supply