Exploring the Law of Supply and Demand

What happens to the price of an item when it is scarce and many people want it?

• The item becomes unavailable

• The price increases

• The price remains the same

• The price decreases

If there is a larger supply of an item than consumer demand, what will happen to its price?

• The item will be discontinued

• The price will remain constant

• The price will fall

• The price will increase

Why did the shoe company reduce the price of their new athletic shoe?

• To decrease demand

• To decrease the supply

• To increase demand

• To increase the supply

What is the term used when the demand for an item balances with its supply?

• Inflation

• Equilibrium

• Deflation

• Recession

What is the market condition called when supply and demand are balanced?

• Equilibrium

• Shortage

• Inflation

• Surplus

How does high unemployment affect employers' salary offers?

• Employers offer higher salaries

• Employers offer lower salaries

• Employers stop hiring

• Salaries remain unchanged

What must employers do when the supply of available jobs is lower than the demand for employment?

• Offer higher salaries

• Maintain current salary levels

• Offer lower salaries

• Reduce job openings

What happens to employers' salary offers when the job market situation reverses and there are fewer job seekers?

• They offer lower salaries

• They offer higher salaries

• They offer the same salaries

• They stop hiring