3.1 Demand, Supply, and Equilibrium in Markets for Goods and Services

Question 1

Economists use the term _______ to refer to the amount of some good or service consumers are willing and able to purchase at each price.

Answer 1

Demand

Question 2

What are two things are demands based off of?

Answer 2

1. Needs and Wants

2. Ability to pay

Question 3

_______ is what a buyer pays for a unit of a specific good or service

Answer 3

Price

Question 4

______ is the total number of units that consumers would purchase at a given price.

Answer 4

Quantity Demanded

Question 5

A _____ in price of a good or service almost always decreases the quantity demanded; A _____ in price will increase the quantity demanded.

Answer 5

Rise; Fall

Question 6

An inverse relationship between price and quantity demanded;

Assumes that all other variables that affect demand are held constant.

Answer 6

Law of Demand

Question 7

______ is a table that shows the quantity demanded at a given price.
Measures quantity demanded at a given price over a period of time.

Answer 7

Demand Schedule

Question 8

__________ shows the relationship between price and quantity demanded;
quantity is on the horizontal axis and price on the vertical axis

Answer 8

Demand Curve

Question 9

_______ and ______ are two ways to describe the same relationship between price and quantity demanded.

Answer 9

Demand Schedule; Demand Curve

Question 10

Demand Curves slope from _____ to _____.

Answer 10

Left to Right

Question 11

What do demand curves embody?

Answer 11

Law of Demand

Question 12

_______ refers to the curve and quantity supplied to the point on the curve.

Answer 12

Supply

Question 13

The ______ and the ______ are two different ways of illustrating supply.

Answer 13

Supply Schedule; Supply Curve

Question 14

On a supply curve _____ is show on the vertical axis and ______ is shown on the horizontal axis.

Answer 14

Price;Quantity

Question 15

________ is created by graphing the points from the supply schedule and connecting them.

Answer 15

Supply Curve

Question 16

The _______ slope of the supply curve illustrates the Law of Supply.
A higher price = Higher Quantity Supplies and vice versa

Answer 16

Upward Slope

Question 17

In the Law of Supply, as price rises the quantity supplied ______; Conversely as prices decreases quantity supplied ______

Answer 17

Increases; Decreases

Question 18

The point at which the supply curve and the demand curve intersect is called ______.

Answer 18

The equilibrium

Question 19

Quantity Demanded is = Quantity Supplied;

Amount of the product consumers want to buy is = amount producers want to sell

Answer 19

Equilibrium Quantity

Question 20

The _____ is the only price where consumers and producers agree.

Answer 20

Equilibrium Price

Question 21

_______ is a situation in which the quantity of a good or service supplied is more than the quantity demanded, and the price is above the equilibrium level determined by supply and demand.

Answer 21

Excess Supply; Surplus

Question 22

Quantity demanded is stimulated by a lower price and is now exceeding quantity supplied

Answer 22

Excess Demand; Shortage