U1 AOS 2 Lesson 10 - Revision 1 Flashcards
What is the Law of Supply?
The Law of Supply states that, all else being equal, an increase in the price of a good will lead to an increase in the quantity supplied.
True or False: According to the Law of Supply, lower prices result in higher quantities supplied.
False
Which of the following factors can cause a shift in the supply curve? A) Technology B) Consumer preferences C) Income levels
A) Technology
Short answer: How does a decrease in production costs affect the supply of a good?
A decrease in production costs typically increases the supply of a good.
What is a shift in demand?
A shift in demand refers to a change in the quantity demanded of a good or service at every price level.
Fill in the blank: A shift to the right in the demand curve represents an ______ in demand.
increase
Which of the following factors can cause a shift in demand? A) Price of the good B) Consumer income C) Technology D) All of the above
B) Consumer income
What is the effect of a decrease in the price of a substitute good on the demand for a product?
It typically causes a decrease in the demand for the product.
What is market equilibrium?
Market equilibrium is the state where the quantity of a good or service demanded equals the quantity supplied at a particular price.
True or False: In a state of market disequilibrium, supply equals demand.
False
Fill in the blank: When the price is set above the equilibrium price, a __________ occurs.
surplus
What happens to prices when there is a surplus in the market?
Prices tend to decrease until equilibrium is restored.
What are non-price factors affecting demand?
Non-price factors affecting demand are variables other than price that can influence the quantity demanded of a good or service.
Fill in the blank: Changes in ________ can lead to shifts in demand for a product.
consumer income
Name one demographic factor that can influence demand.
Age, gender, income level, or education level.
True or False: The substitution effect occurs when a consumer changes their consumption of goods due to a change in their price relative to other goods.
True
