Top 4.3 Supply AND Demand

Question 1

Shortage

Answer 1

MORE DEMAND than supply

Question 2

Surplus

Answer 2

More SUPPLY then demand (Sale)

Question 3

Equilibrium

Answer 3

When Quantity Supplied equals Quantity demanded

Question 4

How to read the graphs with both Supply and Demand Curves? (X shaped)

Answer 4

1. Draw a horizontal line from price to both the sloped lines
2. Determine which is supply and which is demand (Supply + slope, Demand - slope)
3. Determine the supply and demand of the good according to these values

Question 5

What happens during Market Equilibrium

Answer 5

WHEN Supply=DEMAND at particular price, no movement of price from this point unless the curves themself shift!!

Question 6

At what price does the market clear

Answer 6

Equilibrium price!!!

Question 7

Equilibrium PRICE 3 Points

Answer 7

-The price that clears the market
-The price where quantity demanded=quantity supplied
-The price where the demand curve intersects the supply curve

Question 8

Equilibrium Quantity 2 points

Answer 8

The quantity supplyed and demanded at the equilibrium price

The quantity where the demand curve intersects the supply curve

Question 9

Where do shortages exist

Answer 9

At points below market clearing (equilibrium) price

Question 10

Where do surplus exist

Answer 10

At point above market clearing price

Question 11

Price adjustments! Theory of all three first

WHAT IS THIS PRICING SYSTEM THEORY CALLLLLLLLLLED

Answer 11

1. When Surplus, prices go down because they wanna reach market equilibrium
2. When Shortage, prices go up becase they wanna reach parket equilibrium
3. When equilibrium Prices stay the same

THE INVISIBLE HAND BIATCH

Question 12

Price adjustments formulas

Answer 12

1. P>Pe= surplus= P going down
2. P<Pe= shortage = P going up
3. P=Pe= equilibrium= P stay the same (P with dash over head)

Question 13

When you have to do those determine new equilibrium price/quantity q’s how do you do?

Answer 13

1. Which curve shifts/ Does any?
2. How does this curve move???? LEFT OR RIGHT
3. Draw a diagram X and see how the new price and quantity change!!!

Question 14

When Demand curve unchanged…

Supply to the right?
Supply to the left?

Answer 14

P DECREASE, Q INCREASE

P INCREAMS, Q DECREASE

Question 15

When Demand curve shifts to right…

Supply unchanged?
Supply right?
Supply left?

Answer 15

Q increases P increases

Q increases, P AMBIGUOUS

P increases, Q ambiguous

Question 16

When Demand curve shifts to left…

Supply unchanged?
Supply Right?
Supply left?

Answer 16

Q decreases P decreases

P decreases Q ambiguous

Q decreases P Ambiguous

Question 17

WHAT SHOULD YOU DO IN ALLL SUPPLY AND DEMAND QS?

Answer 17

LABEL S AND D FIRST BETCH

Question 18

Determining Q and P algebraically

Answer 18

1.Sub one into other
2. Simplify and solve for variables
3.check

Question 19

Law of demand- price increases changes what

Answer 19

PRICE INCREASES results in QUANTITY DEMANDED decreasing!!!!!!

NOT demand decrease- QUANTITY DEMANDED decreasing

Question 20

Law of supply and demand

Answer 20

It states that the price of any good
adjusts to bring the quantity supplied and the quantity demanded for
that good into balance