Supply and Demand Test Flashcards
The law of demand states that people
Buy less as the price increases and buy More as the price decreases
Demand is willingness and _______ to buy goods and services
Ability
When plotting a demand curve, once needs to use a demand________ in order to determine the various quantities demanded and different prices.
Schedule
The total demand for Apple products is called its what?
Demand Market
What is the satisfaction a consumer receives when they consume a product?
Utility
The concept of diminishing marginal utility means that?
A consumer enjoys their first glass of water more than their last.
Which of the following can impact demand?
a. A change in income
b. A change in taste
c. A change in population
d. All of the above
All of the above
The minimum wage is an example of what?
Price floor
Why do we have price ceilings?
To keep prices from getting too high..
Substitutes are products that can be replaced with one another in case the price of one ________
Increases
Which of the following are substitutes?
a. Peanut Butter and Jelly
b. Shoes and Socks
c. Butter and Margarine
Butter and Margarine
Complements are two products that are bought and used________
Together
What is the amount of a good or service that producers are willing to sell?
Supply
What is a government payment to producers for a specific action?
Subsidy (a sum of money granted by the government or a public body to assist an industry or business so that the price of a commodity or service may remain low or competitive.)
An intersection of the supply and demand curves is called the_________________, this is where the amount demanded equals the amount supplied
Equilibrium price/quantity
Why is it important for businesses to know how much of their product to supply and how much will be demanded by customers?
So they will not have a surplus
So they can make the most money possible
So they will not have a shortage of products
A surplus occurs when the amount demanded is ________ than the amount supplied
Less
A shortage occurs when the amount supplied is________ than the amount demanded.
Less
Which of the following states that suppliers will sell more items at a higher price and less items at a lower price?
a. The law of demand
b. The law of subsidies
c. The law of supply
The law of supply
With complements, like coffee and doughnuts, if you increase the price for one the demand for the other_______
Decreases
With substitutes, like Pepsi and Coke, if you reduce the price for one the demand for the other __________
Decreases
A product whose quantity demanded changes greatly in response to a change in price is said to have a very______ demand
Elastic
A product whose quantity demanded DOES NOT change greatly in response to a change in price is said to have a very________ demand
Inelastic
An example of a good with a very inelastic demand would be________
a. water
b. luxury cars
c. vacations
Water
