Essential short-answer quiz on supply and demand! Whether you're a student, educator, or just curious about economics, this 30-question quiz will help you grasp the fundamental concepts.
Essential short-answer quiz on supply and demand! Whether you're a student, educator, or just
curious about economics, this 30-question quiz will help you grasp the fundamental concepts.
• What is the law of demand?
• The law of demand simply says that when the price of something goes up,
people tend to buy less of it. Conversely, if the price drops, they usually buy
more.
• What is the law of supply?
• The law of supply explains that as prices rise, producers are generally willing to
supply more of a product to meet demand. If prices fall, they usually produce
less.
• Define market equilibrium.
• Market equilibrium is like the sweet spot in economics. It's where the amount of
goods people want to buy matches exactly what producers are willing to supply,
leading to a stable price.
• What happens to the price if demand increases but supply stays the same?
• In this case, prices typically go up because there's more demand than supply
available.
• Explain what a substitute good is.
• Think of substitute goods like alternatives. For example, if the price of one brand
of cereal goes up, people might buy another brand that costs less but serves the
same breakfast purpose.
, • Explain what a complementary good is.
• Complementary goods are those that go hand in hand. Like hot dogs and buns—
if hot dog demand spikes, so does the bun demand because you need both for a
complete meal.
• What does price elasticity of demand measure?
• Price elasticity of demand shows how sensitive people are to price changes. If a
product's demand is elastic, people will change their buying habits a lot when
prices fluctuate.
• How does total revenue change if demand is elastic and prices rise?
• When demand is elastic and prices go up, total revenue tends to drop because
fewer people buy the product at the higher price.
• How does total revenue change if demand is inelastic and prices rise?
• Inelastic demand means people still buy a product even if its price rises. So,
when prices go up, total revenue often goes up too because people keep buying
despite the cost.
• Define a surplus in supply and demand terms.
• A surplus happens when producers make more of something than people want to
buy at the current price. This usually leads to lower prices to sell off the excess.
• Define a shortage in supply and demand terms.
• Shortages occur when people want more of something than producers are
currently making available at the current price. This can drive prices up as
demand outpaces supply.
• What causes a shift in the demand curve?
• Changes in how much people earn, their tastes, the prices of related goods, what
they expect to pay, or how many buyers there are—all these can shift the
demand curve.
• What causes a shift in the supply curve?
• The supply curve shifts when production costs change, technology improves,
related goods' prices shift, producers' expectations change, or more sellers enter
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller temidayorolland. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $5.49. You're not tied to anything after your purchase.
