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HCM 402 Chapter 3: Demand and Supply || with Error-free Solutions.
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define demand correct answers the amount of a good or service consumers are willing and able to purchase at each price demand is based on correct answers needs, wants, ability to pay effective demand correct answers The desire for a good or service backed by an ability to pay define price ...

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  • August 16, 2024
  • 6
  • 2024/2025
  • Exam (elaborations)
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  • define demand

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HCM 402 Chapter 3: Demand and Supply || with Error-free
Solutions.
define demand correct answers the amount of a good or service consumers are willing and able
to purchase at each price

demand is based on correct answers needs, wants, ability to pay

effective demand correct answers The desire for a good or service backed by an ability to pay

define price correct answers what a buyer pays for a unit of the specific good or service

define quantity demanded correct answers the total number of units that consumers would
purchase at that price

relationship between price and quantity demanded correct answers increase in price ---->
decrease in quantity demanded
decrease in price ---> increase in quantity demanded

law of demand correct answers inverse relationship between price and quantity demanded

the law of demand assumes correct answers that other variables that affect demand are constant

demand schedule correct answers a table that shows the quantity demanded at each price

demand curve correct answers graph that shows the relationship between price and quantity
demanded

what variables are on the axes of demand and supply curves correct answers x: quantity
y: price

define supply correct answers the amount of some good or service a producer is willing to supply
at each price

law of supply correct answers The positive relationship between price and quantity of a good
supplied: An increase in market price will lead to an increase in quantity supplied, and a decrease
in market price will lead to a decrease in quantity supplied.

supply schedule correct answers a table that shows the relationship between the price of a good
and the quantity supplied

supply curve correct answers a graph that shows the relationship between price and the quantity
that producers are willing and able to supply

, define equilibrium correct answers the point where the supply curve (S) and demand curve (D)
cross

equilibrium price correct answers the price where quantity demanded equals quantity supplied;
that is, the amount that consumers want to buy is equal to the amount producers want to sell at
this price

equilibrium quantity correct answers the quantity at which the quantity demanded is equal to the
quantity supplied

how to find equilibrium on supply and demand schedules correct answers locate price at which
quantity demanded and supplied are equal

excess supply correct answers the quantity supplied exceeds the quantity demanded

surplus correct answers see excess supply

excess demand correct answers at a given price, the quantity demanded, stimulated by lower
prices, exceeds the quantity supplied, depressed by lower prices

shortage correct answers see excess demand

What happens to quantity supplied when price increases? correct answers It increases because it
becomes more profitable for producers to expand output (except that quantity demand is also
lower)

a surplus occurs when price is correct answers above-equilibrium

a shortage occurs when price is correct answers below-equilibrium

how do producers act in a shortage that restores equilibrium price? correct answers they
recognize an opportunity to profit by selling what limited stock they do have at higher prices,
therefore pushing depressed prices back up towards equilibrium

Ceteris Paribus correct answers assumption that no relevant economic factors are changing;
means "other things being equal"

Name some factors that affect demand correct answers willingness to purchase
taste & preferences
wants & needs
income (ability to purchase)
prices of related goods
size & composition of the population

Higher income causes a _________ shift to the demand curve, meaning ... correct answers right;
an increase in demand occurs at every price

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