Supply and Demand

Question 1

Market

Answer 1

A group of buyers and sellers of particular good or service.

Question 2

Competitive Market

Answer 2

A market in which there are many buyers and many sellers so that each has a negligible impact on the market price.

Question 3

Perfectly competitive

Answer 3

1. The good for sale are all the same

2. The buyers and sellers are so numerous that no single one can influence market price.

Question 4

Quantity demanded

Answer 4

The amount of a good that buyers are willing and able to purchase.

Question 5

Law of demand

Answer 5

The claim that, other things equal, the quantity demanded of a good falls when the price of good rises.

Question 6

What determines quantity demand

Answer 6

1. Price
2. Income
3. Price of related goods
4. Tastes
5. Expectations

Question 7

Quantity supplied

Answer 7

The amount of a good that sellers are willing and able to sell.

Question 8

What determines quantity supplied

Answer 8

1. Price
2. Input prices
3. Technology
4. Expectations

Question 9

Law of supply

Answer 9

Claim that, other things equal, the quantity supplied of goods rises when the price of goods rises.