Unit 2 - Supply & Demand

Question 1

Demand

Answer 1

The quantity of a good or service that consumers are willing and able to purchase at specific prices.

Question 2

Law of Demand

Answer 2

Consumers will tend to purchase more of a good or service at lower prices & less at higher prices.

Question 3

Supply

Answer 3

Quantity of a good or service that producers are willing & able to sell at specific prices.

Question 4

Law of Supply

Answer 4

Producers are willing to sell more of a good or service at higher prices & less at lower prices.

Question 5

Equilibrium

Answer 5

The price at which the quantity that consumers would like to buy is identical to the quantity that producers would like to sell.

Question 6

Name Determinants of Demand

Answer 6

-Taste & Preferences
-Income
-Price of substitute goods
-Price of complementary goods
-Population of consumers
-Consumer expectations

Question 7

Name Supply determinants

Answer 7

-Costs of production
-Changes in technology
-Events that could cause an increase or decrease in production
-Government policies
-Number of sellers