demand and supply

Question 1

definition of demand

Answer 1

the willingness and ability of a consumer to buy

Question 2

definition of supply

Answer 2

the willingness and ability of a producer to sell a good

Question 3

law of demand

Answer 3

inverese relation of price and quantity demanded

Question 4

law of supply

Answer 4

direct relation of price and quantity supplied

Question 5

what changes quantity demanded

Answer 5

price

Question 6

what changes quantity supplied

Answer 6

price

Question 7

what changes in demand

Answer 7

TRIPE
T = taste and preference
R = related goods (compliments and substitutes)
I = income
P = population
E = expectation of future prices

Question 8

what changes supply

Answer 8

NICE JAG
N = natural phenomenom
I = Input costs
C = competition
E = expectations
J = joint goods (profitability)
A = alternative goods (profitability)
G = government action

Question 9

change in demand vs. change in quantity demand

Answer 9

demand = moving the demand line up or down
quantity demand = moving along the line

Question 10

upside down triangle

Answer 10

surplus
(decrease price to get rid of)

Question 11

normal triangle

Answer 11

shortage
(increase price to get rid of)

Question 12

surplus

Answer 12

when there is an abundance of goods, more than demanded
(Qd<Qs)

Question 13

shortage

Answer 13

when there aren’t enough goods, less than the demanded
(Qd>Qs)

Question 14

Ceiling prices

Answer 14

lower than the equilibrium

Question 15

floor prices

Answer 15

above the equilibrium