Supply or Demand?
This law states that as the price of a product increases, consumers purchase less of it, all else equal.
Law of Demand
The price of Nike shoes decreases, causing consumers to buy more Nike shoes. Movement or shift?
Movement along the demand curve
A celebrity promotes a new energy drink, making it more popular. Identify the shifter.
Tastes and preferences
Demand increases while supply remains unchanged. What happens to equilibrium price and quantity?
Price increases; quantity increases
A new apartment complex brings 500 residents into a neighborhood. What happens to demand for nearby pizza delivery?
Demand increases (number of buyers)
This curve slopes upward from left to right.
Supply curve
A new manufacturing technology allows Ford to produce more cars at every price. Movement or shift?
Shift of the supply curve to the right
The government provides financial assistance to farmers for every bushel of corn they produce. Identify the shifter.
Subsidies (cost of production)
Supply increases while demand remains unchanged. What happens to equilibrium price and quantity?
Price decreases; quantity increases
The price of coffee beans increases. What happens to the supply of Starbucks coffee and its equilibrium price?
Supply decreases; equilibrium price increases
The amount of a product consumers are willing and able to purchase at a particular price.
Quantity demanded
The price of gasoline increases, causing producers to offer more gasoline for sale. Movement or shift?
Movement along the supply curve
The price of hot dogs increases, causing consumers to buy fewer hot dog buns. Identify the shifter.
Price of a complement
Demand decreases while supply remains unchanged. What happens to equilibrium price and quantity?
Price decreases; quantity decreases
A major competitor closes several locations. What happens to the supply of fast-food burgers and equilibrium quantity?
Supply decreases; equilibrium quantity decreases
This term describes the price at which quantity supplied equals quantity demanded.
Equilibrium price
The price of Pepsi rises, causing consumers to purchase more Coca-Cola. Which curve changes, and how?
Coca-Cola's demand curve shifts right
A restaurant hires and trains its employees more effectively, allowing it to serve more meals per hour. Identify the shifter.
Productivity (cost of production)
Supply decreases while demand remains unchanged. What happens to equilibrium price and quantity?
Price increases; quantity decreases
Consumers' incomes rise, but purchases of instant ramen decrease. What type of good is instant ramen in this scenario, and what happens to its demand?
Inferior good; demand decreases
A price increase causes producers to offer more of a product for sale. This is known as a change in _____.
Quantity supplied
The price of concert tickets falls, causing more tickets to be purchased. Identify the curve, movement or shift, and direction.
Movement down and to the right along the demand curve; quantity demanded increases
Consumers believe smartphones will be significantly cheaper next month, so many delay buying one. Identify the shifter and direction.
Consumer expectations of future price; demand shifts left
A new tax raises the cost of producing video game consoles. What happens to equilibrium price and quantity?
Price increases; quantity decreases
Pizza restaurants expect they can sell pizzas at much higher prices next month, so they reduce the amount offered for sale today. Identify the shifter, curve direction, and effects on both equilibrium values.
Producer expectations of future price; supply shifts left; equilibrium price increases and quantity decreases