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Questions and Answers
Which factor does not shift the demand curve?
What is represented by a demand curve?
When economists reference an increase in supply, they mean:
Which of the following is a characteristic of equilibrium price?
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What results from a surplus in the market?
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Which of the following can cause a demand curve to shift to the left?
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The market supply curve is defined as:
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Which factor is likely to lead to a rightward shift in the supply curve?
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What happens to the demand for a good when there is an increase in population?
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How is market demand derived from individual demand?
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What does a supply curve represent?
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If the population decreases, what would most likely happen to the demand for a good?
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Which statement accurately reflects the concept of individual demand and market demand?
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What happens to the individual demand curve when a consumer's income increases?
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Which of the following correctly illustrates the relationship between supply and demand?
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How does the market demand curve appear graphically?
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What does a shift in the demand curve indicate?
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Which scenario might result in an increase in demand for a product?
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What is the effect of a decrease in price on the quantity demanded?
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When examining the demand schedules for coffee beans in 2002 and 2006, what is a likely implication of increased demand?
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How does a movement along the demand curve differ from a shift of the demand curve?
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Which statement is true regarding the demand curves for coffee beans in 2002 and 2006?
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When the population increases, what generally happens to the demand for coffee beans?
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Which of the following is an example of an important demand shifter?
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In the context of demand, what does it mean for a product to have a rightward shift in its demand curve?
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Which factor would NOT lead to an increase in demand for a product?
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What effect does an increase in the number of producers have on the supply curve?
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How does an increase in the expected future price of a good influence current supply?
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What defines the market supply curve in a competitive market?
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What happens to the supply curve when technological advancements reduce production costs?
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What is the equilibrium price in a competitive market?
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If the supply curve shifts due to an increase in producer expectations about future prices, what would be an immediate effect?
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In terms of equilibrium, what occurs when the quantity demanded exceeds the quantity supplied?
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Which scenario would lead to a leftward shift of the supply curve?
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What does a rightward shift of the supply curve indicate?
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What is the difference between a shift of the supply curve and a movement along the supply curve?
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In the provided data, how many billions of pounds of coffee beans are supplied at the price of €1.50 before Vietnam's entry?
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After Vietnam's entry, what is the quantity supplied at a price of €2.00?
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What triggers a movement along the supply curve?
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If the entry of more coffee producers results in an increase in supply, what happens to the supply curve?
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Which of the following represents a quantity supplied change due to price?
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At a price of €0.75, how much was supplied after Vietnam’s entry?
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What is the quantity of coffee beans supplied at €1.00 after Vietnam's entry?
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If the coffee price decreases, what will generally happen to the quantity supplied?
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Study Notes
Supply and Demand Model
- The supply and demand model illustrates how a competitive market operates
- The demand schedule displays the quantity demanded at different prices. This information is visually represented by a downward-sloping demand curve.
- Movements along the demand curve occur when price changes lead to changes in the quantity demanded.
- Shifts of the demand curve represent changes in demand, which is the quantity demanded at any given price.
- Five key factors influence the shifting of the demand curve:
- Changes in the prices of related goods or services
- Changes in income
- Changes in tastes
- Changes in consumer expectations
- Changes in the number of consumers
- The market demand curve for a good or service is the sum of individual demand curves for all consumers in that market.
- The supply schedule shows the quantity supplied at different prices. The supply curve is typically upward sloping, meaning higher prices lead to increased supply.
- Movements along the supply curve occur when price changes result in changes in the quantity supplied.
- Shifts of the supply curve demonstrate changes in supply, which is the quantity supplied at any given price.
- Five main factors cause shifts in the supply curve:
- Changes in input prices
- Changes in the prices of related goods and services
- Changes in technology
- Changes in producer expectations
- Changes in the number of producers
- The market supply curve for a good or service is the sum of individual supply curves for all producers in that market.
Finding Equilibrium
- The intersection of the supply and demand curves indicates the market equilibrium point. This is where the quantity demanded equals the quantity supplied.
- The corresponding price at the equilibrium point is called the equilibrium price (also known as the market-clearing price).
- When the price is above the equilibrium price, there is a surplus, pushing the price downward.
- When the price is below the equilibrium price, there is a shortage, pushing the price upward
- An increase in demand leads to higher equilibrium prices and quantities, while a decrease in demand has the opposite effect.
- Shifts in the supply curve are caused by changes in the quantity supplied at any given price.
Demand Shifts
- An increase in population or other factors leading to increased demand for a good is represented by a shift to the right of the demand curve.
- Market demand is the total demand of all individuals for a particular good or service.
- The market demand curve is the horizontal sum of individual demand curves for all consumers.
Supply Shifts
- An increase in supply due to factors such as new producers entering the market or advancements in technology is illustrated by a shift to the right of the supply curve.
- A shift in the supply curve reflects changes in the quantity supplied at any given price.
- Technological advancements have the potential to decrease production costs, leading to increased supply.
- Expectations regarding future prices can influence current supply. For example, an anticipated rise in future prices may lead to decreased current supply.
- The market supply curve is a horizontal summation of individual supply curves for all producers in the market.
- Supply represents the behavior of those who sell goods or services.
- The equilibrium point in a competitive market occurs when the quantity demanded equals the quantity supplied.
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Description
Test your understanding of the supply and demand model, a fundamental concept in economics. This quiz covers key aspects such as the demand schedule, movements along the demand curve, and factors influencing demand shifts. Dive in to assess your knowledge of how competitive markets operate!