Econ Determinants of Supply and Demand

Questions and Answers

What are the determinants of demand? (Select all that apply)

Change in income (correct)

Change in population (correct)

Change in technology

Change in the price of resources

What are the determinants of supply? (Select all that apply)

Change in consumer tastes

Change in the number of producers (correct)

Change in demographics

Change in the price of resources (correct)

Why is there more of a demand for pizza during the summer?

Increased population

What happens to attendance at games when Tom Brady goes to the Jets during preseason?

Increased attendance because of change in tastes and preferences Signup and view all the answers

What is a normal good?

As you make more money, you increase demand for certain goods Signup and view all the answers

What are inferior goods?

As you make more money, your demand for certain things decreases Signup and view all the answers

What are substitute goods?

When Xbox lowers its prices, the price of a related good will lose demand Signup and view all the answers

What are complementary goods?

Good used along with another good that has a changed price Signup and view all the answers

What happens when customers are taxed?

The demand for that product decreases Signup and view all the answers

What happens to supply as resources increase in price?

Decreases Signup and view all the answers

What happens to supply as technology increases?

Increases Signup and view all the answers

What occurs if 3 out of 10 pizza places in Verona go out of business?

Number of suppliers decreases so number of supplied goods decreases Signup and view all the answers

What happens to supply when producers are taxed?

The supply for that product decreases Signup and view all the answers

If the price of tires is expected to be high in the future, what will suppliers do?

Decrease supply now and increase it in the future Signup and view all the answers

What happens to tomatoes if the price of corn increases along with its quantity supplied?

Decrease in supply Signup and view all the answers

What happens to oranges in Florida after a hurricane?

Decrease in supply Signup and view all the answers

What is a supply curve used for?

Shows how much of a good or service producers will supply at different prices Signup and view all the answers

What is the quantity supplied?

The actual amount of a good or service producers are willing to sell at some specific price Signup and view all the answers

What is a supply schedule?

Shows how much of a good or service producers will supply at different prices Signup and view all the answers

Study Notes

Determinants of Demand

Factors influencing consumer desire for a product include population changes, demographics, and shifts in tastes/preferences.
Income changes can affect demand for normal goods (demand increases with income) and inferior goods (demand decreases with income).
The price of related goods impacts demand: substitute goods see increased demand if their price rises, while complementary goods increase in demand if their price falls.
Consumer expectations about future prices affect current demand levels.
Changes in taxes and subsidies placed on consumers can either increase or decrease demand.

Determinants of Supply

Supply is influenced by resource prices; an increase leads to decreased supply.
Technological advancements generally result in increased supply.
The number of producers in the market directly affects supply; more producers typically increase supply.
Changes in taxes or subsidies on producers can either increase or decrease supply levels.
Producers' expectations about future prices influence current supply decisions.
The price of substitute goods in production impacts supply; if it rises, the supply of alternatives may decrease.

Demand Variations

Demand for pizza increases during summer months due to population growth.
Changes in consumer preferences, such as a popular player joining a team, can lead to higher attendance at games.

Goods Classification

Normal goods have increased demand as consumer income rises.
Inferior goods see a decrease in demand as consumer income rises.
Substitute goods lose demand when the price of an alternative (e.g., Xbox) is reduced.
Complementary goods experience increased demand when the price of a related product (e.g., games/controllers for Xbox) drops.

Impact of Taxes and Subsidies

Imposing taxes on consumers generally lowers demand for affected products.
Subsidies typically result in increased demand for certain products.

Supply Dynamics

Rising resource prices lead to a decrease in supply due to increased production costs.
Enhanced technological capabilities result in increased supply by enabling higher production efficiency.
A decline in the number of suppliers (e.g., closures of pizza places) leads to a reduced supply of goods.
Taxation of producers results in decreased supply, whereas subsidies can cause an increase in supply.

Future Supply Predictions

If suppliers anticipate higher future prices (e.g., tires), they are likely to reduce current supply.
Increased supply of one crop (e.g., corn) tends to decrease the supply of others (e.g., tomatoes).
Natural disasters (e.g., hurricanes in Florida) result in decreased supply of affected goods like oranges.

Supply Characteristics

Supply curves illustrate the relationship between price levels and the quantity of goods/services supplied.
Quantity supplied refers to the specific amount producers are willing to sell at a given price.
Supply schedules provide a framework for understanding how supply varies at different price points.

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Description

This quiz covers the key determinants of supply and demand in economics. Explore factors such as changes in population, consumer preferences, income, and related goods. Perfect for students looking to solidify their understanding of economic principles.