Demand
This economic principle states that as the price of a good decreases, the quantity demanded for that good generally increases, assuming all other factors remain constant.
What is the law of demand?
This principle states that as the price of a good increases, the quantity supplied of that good generally increases, assuming all other factors remain constant.
What is the law of supply?
This economic principle states that as a person consumes more units of a good, the additional satisfaction gained from each additional unit decreases, assuming all other factors remain constant.
What is the law of diminishing marginal utility?
Strawberries have come up in a new Tik Tok trend making them more popular, demand for strawberries would...
shift right
Draw a supply and demand diagram for the market of chocolate bars. If there is a sudden increase in consumer incomes, how will the demand curve for chocolate bars change?
The demand curve will shift to the right. This shift represents an increase in demand due to higher consumer incomes, assuming chocolate bars are a normal good.
On a demand curve, this term describes the movement along the curve that occurs in response to a change in the price of the good itself.
What is a change in quantity demanded?
On a supply curve, this term describes the movement along the curve that occurs in response to a change in the price of the good itself.
What is a change in quantity supplied?
This principle describes a situation in production where adding more units of a variable input to fixed inputs results in smaller increases in output.
What is the law of diminishing marginal returns?
If income increased, which way would demand shift for ramen noodles (inferior good)?
demand would shift left
In the market for electric cars, if a technological breakthrough significantly lowers production costs, draw and explain how the supply curve will shift.
The supply curve will shift to the right, indicating an increase in supply due to lower production costs. The new equilibrium will be at a lower price and a higher quantity compared to the initial equilibrium.
In a market where the demand for luxury cars increases as consumer incomes rise, this term describes the specific type of good for which demand increases as income rises, reflecting a positive relationship with economic conditions.
What is a normal good?
If new regulations increase the cost of production, the result is typically a shift in the supply curve in this direction.
What is a leftward shift?
This term refers to the phenomenon where the cost of producing each additional unit of a good increases as more units are produced, often due to decreased efficiency.
What is increasing marginal costs?
Beef,Hide, and Milk are all in joint supply. An increase in the selling price of beef will cause a(n) __________ in supply for milk.
increase ( supply shift right)
Assume the price of coffee beans rises due to a poor harvest, and coffee shops respond by increasing their prices.
The supply curve for coffee will shift to the left, reflecting a decrease in supply due to higher input costs. This will result in a higher equilibrium price and a lower equilibrium quantity.
This term describes the situation where a change in factors other than the price of a good, such as consumer preferences or incomes, causes the entire demand curve to shift.
What is a shift in demand?
This term describes the situation when the total supply of a good in the market remains unchanged despite an increase in the price of that good, often because of limitations in production capacity.
What is a vertical supply curve?
When a consumer experiences less satisfaction from consuming each additional slice of pizza, this effect is explained by this law.
What is the law of diminishing marginal utility?
Coke and Pepsi are substitute goods, if the price of Coke increases the demand for Pepsi would...
increase (shift right)
If a new study reveals that consuming avocados significantly improves health and simultaneously, avocado farmers face a severe drought reducing production, draw a supply and demand diagram for avocados.
The demand curve for avocados will shift to the right due to the increased health benefits, while the supply curve will shift to the left due to the drought. The equilibrium price will increase, but the effect on equilibrium quantity will be ambiguous—it could increase, decrease, or remain the same depending on the relative magnitude of the shifts in demand and supply.
When the price of a product decreases and consumers purchase more of it, this effect is partially explained by the fact that consumers perceive the product as relatively more affordable compared to other goods. This concept is known as:
What is the income effect?
A farmer is producing corn and wheat. These goods are in competitive supply. If the selling price of corn increases what effect does this have on the supply of wheat?
decrease in supply of wheat.
The increase in marginal costs as output expands beyond a certain point due to factors such as inefficiencies or bottlenecks can be explained by this principle.
What is the law of increasing marginal costs?
Spirit Halloween expects prices to increase in the future, this would cause Spirit's present supply curve to...
shift left
In the market for organic vegetables, if a government health initiative promotes the benefits of organic food and consumers become more aware of its health advantages, draw a demand and supply diagram for organic vegetables.
Draw the demand curve shifting to the right.