Podcast
Questions and Answers
What determines a consumer's effective demand for a good or service?
What determines a consumer's effective demand for a good or service?
- The consumer's need or want for the item only.
- The popularity of the item among other consumers.
- The consumer's ability to differentiate between needs and wants.
- The consumer's ability to pay for the item. (correct)
What is the law of demand primarily concerned with?
What is the law of demand primarily concerned with?
- The relationship between demand and supply.
- The effects of consumer income on demand.
- The factors that shift the demand curve.
- The relationship between price and quantity demanded. (correct)
What does a demand schedule specifically show?
What does a demand schedule specifically show?
- How consumer preferences shift over time.
- The quantity demanded at each price for a specific good or service. (correct)
- Prices for a variety of goods.
- Predicted future prices based on current demand.
In a demand curve graph, where is the quantity demanded plotted?
In a demand curve graph, where is the quantity demanded plotted?
When the price of gasoline increases, what is a common consumer response?
When the price of gasoline increases, what is a common consumer response?
Which of the following can affect the quantity demanded according to the law of demand?
Which of the following can affect the quantity demanded according to the law of demand?
What is typically true about the relationship between price and quantity demanded?
What is typically true about the relationship between price and quantity demanded?
Which statement accurately reflects the concept of demand from an economist's perspective?
Which statement accurately reflects the concept of demand from an economist's perspective?
What does the law of supply state regarding the relationship between price and quantity supplied?
What does the law of supply state regarding the relationship between price and quantity supplied?
What is the equilibrium price in the context provided?
What is the equilibrium price in the context provided?
What happens when the price is above the equilibrium price?
What happens when the price is above the equilibrium price?
What is indicated by the intersection of the supply curve and the demand curve?
What is indicated by the intersection of the supply curve and the demand curve?
When the price of gasoline decreases to $1.20, what happens to quantity demanded?
When the price of gasoline decreases to $1.20, what happens to quantity demanded?
What results from a price that is below equilibrium?
What results from a price that is below equilibrium?
What is the role of profit-seeking firms when the price of gasoline rises?
What is the role of profit-seeking firms when the price of gasoline rises?
What happens to gasoline supply if the price reaches $1.80 per gallon?
What happens to gasoline supply if the price reaches $1.80 per gallon?
What is a supply schedule?
What is a supply schedule?
How do producers and consumers react when prices are above equilibrium?
How do producers and consumers react when prices are above equilibrium?
What does the term 'excess demand' refer to?
What does the term 'excess demand' refer to?
What occurs at the equilibrium price?
What occurs at the equilibrium price?
What encourages sellers to lower prices when there is surplus?
What encourages sellers to lower prices when there is surplus?
Which of the following actions might producers take in response to rising gasoline prices?
Which of the following actions might producers take in response to rising gasoline prices?
Flashcards
Demand
Demand
The amount of a good or service consumers are willing and able to buy at a specific price.
Need or Want
Need or Want
Something someone needs or wants. Economists consider needs and wants the same thing.
Supply
Supply
The amount of a good or service a producer is willing to sell at a certain price.
Price
Price
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Quantity Demanded
Quantity Demanded
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Law of Demand
Law of Demand
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Demand Schedule
Demand Schedule
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Demand Curve
Demand Curve
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Law of Supply
Law of Supply
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Supply Schedule
Supply Schedule
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Supply Curve
Supply Curve
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Equilibrium Point
Equilibrium Point
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Equilibrium Price
Equilibrium Price
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Equilibrium Quantity
Equilibrium Quantity
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Excess Supply (Surplus)
Excess Supply (Surplus)
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Excess Demand (Shortage)
Excess Demand (Shortage)
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Market Forces
Market Forces
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Market Adjustment
Market Adjustment
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Supply Shifter
Supply Shifter
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Marginal Cost
Marginal Cost
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Marginal Revenue
Marginal Revenue
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Profit-Maximizing Output
Profit-Maximizing Output
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Price Elasticity of Supply
Price Elasticity of Supply
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Study Notes
Demand and Supply
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Demand: The amount of a good or service consumers are willing and able to buy at each price. Stems from needs and wants, both viewed as equivalent by economists. Also relies on the consumer's ability to pay.
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Quantity Demanded: The total amount of a good or service consumers will purchase at a specific price.
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Law of Demand: An inverse relationship between price and quantity demanded; usually, as price rises, quantity demanded falls, and vice versa. Assumes all other factors affecting demand remain constant.
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Demand Schedule: A table showing the quantity demanded at various prices.
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Demand Curve: A graph illustrating the relationship between price and quantity demanded, with quantity on the horizontal axis and price on the vertical axis.
Supply
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Supply: The amount of a good or service a producer is willing and able to offer for sale at each price.
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Quantity Supplied: The total amount of a good or service producers will offer at a specific price.
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Law of Supply: A positive relationship between price and quantity supplied; usually, as price rises, quantity supplied rises, and vice versa. Assumes all other factors affecting supply remain constant.
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Supply Schedule: A table showing the quantity supplied at various prices.
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Supply Curve: A graph showing the relationship between price and quantity supplied.
Equilibrium
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Equilibrium: The point where the supply curve and demand curve intersect. Represents a balance where the quantity demanded equals the quantity supplied.
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Equilibrium Price: The price at which the quantity demanded and the quantity supplied are equal.
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Equilibrium Quantity: The quantity bought and sold at the equilibrium price.
Disequilibrium
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Excess Supply (Surplus): When quantity supplied exceeds quantity demanded at a given price (above equilibrium). Results in downward pressure on price towards equilibrium.
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Excess Demand (Shortage): When quantity demanded exceeds quantity supplied at a given price (below equilibrium). Results in upward pressure on price towards equilibrium.
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Market Responses:
- Surplus: Producers decrease prices, increasing demand.
- Shortage: Consumers increase demand, and producers raise prices.
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Equilibrium Stability: Markets tend to move towards equilibrium due to these self-correcting mechanisms.
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Description
Explore the fundamental concepts of demand and supply in this quiz. Understand the connections between price, quantity demanded, and how supply impacts market dynamics. Test your knowledge on key terms such as demand schedule and demand curve.
