Law of Supply & Demand
Shifts & Determinants
Equilibrium
Elasticity
Government Interventions
100

What does the Law of Demand state?

As price decreases, quantity demanded increases.

100

Name one determinant of demand.

Buyers, Income, Related Goods, Preferences, Expectations


100

What is market equilibrium?

Where quantity demanded equals quantity supplied.

100

What is elasticity of demand?

The responsiveness of quantity demanded to price changes.

100

What is a price ceiling?

A legal max price, like rent control.

200

If the price rises, what happens to the quantity demanded?

It decreases.

200

Give an example of the demand curve shifting to the  right

NA

200

What causes a surplus?

Price above equilibrium.

200

If PED > 1, what is the product?

Elastic.

200

What is a price floor?

A legal minimum price, like minimum wage.

300

Why does the supply curve slope upward?

Producers are willing to supply more at higher prices.

300

What are factors for supply?

Change in goods, change in resources, technology, # of Sellers, Expectations

300

How does the market respond to a shortage?

Prices rise.

300

Name one inelastic good.

Gasoline, insulin, salt.

300

What happens with a price floor above equilibrium?

Surplus.

400

What causes movement along the demand curve?

A change in the product’s own price.

400

Give a real-world example of a demand shifter.

NA


400

What happens to equilibrium when demand increases?

Both price and quantity increase.

400

How is revenue affected if price rises and demand is inelastic?

Revenue increases.

400

Why do price ceilings cause shortages?

Demand exceeds supply due to low prices.

500

Give an example of the Law of Demand in your daily life.

NA

500

What is the difference between a change in demand and quantity demanded?

  • Demand shift = new curve; quantity demanded = movement on same curve.

500

What happens when both supply and demand decrease?

  • Quantity falls; price effect depends on the magnitude of shifts.

500

What formula is used to calculate elasticity?

% change in quantity ÷ % change in price (or midpoint formula).

500

Give a real example of a government setting a price floor.

Minimum wage law.