Demand, supply, and prices

Question 1

As buyers and sellers interact, the market moves toward ________

Answer 1

Market Equilibrium

Question 2

________ is the price at which quantity demanded and the quantity supplied are equal

Answer 2

Equilibrium price

Question 3

The vertical axis shows what?

Answer 3

Prices

Question 4

the horizontal axis shows the what?

Answer 4

Quantity demanded and Quantity Supplied

Question 5

_____ is the result of QS being greater than QD

Answer 5

Surplus

Question 6

_______ is the result of QD being greater than QS

Answer 6

shortage

Question 7

When there is a shortage, producers do what to prices?

Answer 7

raise

Question 8

when there is a surplus, producers do what to prices?

Answer 8

lower

Question 9

six factors of Demand

Answer 9

Income, market size, consumer tastes, consumer expectations, substitute goods, and complementary goods

Question 10

Six factors of Supply

Answer 10

Input cost, Labor productivity, technology, government actions, producer expectations, and number of producers

Question 11

A decrease in demand moves the graph to the _______

Answer 11

left

Question 12

when you increase you moves the graph to the________

Answer 12

right

Question 13

Demand is _________

Answer 13

Direct

Question 14

Supply is________

Answer 14

Inverse

Question 15

A _______ is the legal maximum price that sellers may charge for a product

Answer 15

price ceiling

Question 16

A _________ is a legal minimum price that buyers must pay for a product

Answer 16

price floor

Question 17

The _________ is a legal minimum amount that an employer must pay for one hour of work

Answer 17

minimum wage

Question 18

________ is a system in which the government allocates goods and services using factors other than price

Answer 18

rationing

Question 19

A _______ involves illegal buying or selling in violation of price controls or rationing

Answer 19

black market

Question 20

A ______occurs below equilibrium

Answer 20

binding price ceiling

Question 21

A ________occurs above equilibrium

Answer 21

binding price floor

Question 22

__________ occurs when producers sell goods and services at prices that best balance the twin desires of making the highest profit and luring consumers away from rival producers

Answer 22

competitive pricing

Question 23

four characteristics of the price system

Answer 23

its neutral, its market driven, its flexible, its efficient

Question 24

An _________ encourages people to act in certain ways

Answer 24

incentives

Question 25

for producers, the price system has two great advantages:

Answer 25

Information and Motivation

Question 26

_______ act as signals and incentives to consumers

Answer 26

prices

Question 27

________ rely on the consumer perception that a certain logo is worth a higher price

Answer 27

brand marketers