Supply & Demand Crash Course

What is a market in the context of economics?

• An online platform for digital goods only

• A specific location for trading stocks

• Any location where buyers and sellers exchange goods and services

• A place where only financial transactions occur

What principle underlies the concept of voluntary exchange?

• Both parties involved must benefit financially

• Buyers and sellers willingly engage in transactions

• Exchanges can only occur in a physical marketplace

• All exchanges must be approved by a regulatory body

How do competitive markets allocate resources?

• Through government intervention

• By allowing monopolies to set prices

• Using price signals to guide resource distribution

• By limiting the production of goods

Why might economists argue against government intervention in markets?

• It increases the supply of goods

• It can lead to inefficient resource allocation

• It stabilizes prices permanently

• It always benefits consumers

Why are supply and demand not considered absolute laws?

• They apply only to certain goods

• They are influenced by human actions

• They are outdated concepts

• They are proven scientific facts