Demand
The law of demand states this relationship between price and quantity
As price goes up, quantity demanded goes down
The law of supply states this relationship between price and quantity
As price goes up, quantity supplied goes up
This is the point where supply and demand intersect
Equilibrium
A rise in the price of apples causes people to buy fewer apples. Shift or movement, and for which curve(s)?
Upward movement along the demand curve
When quantity supplied > quantity demanded
Surplus
This type of good experiences an increase in demand when income rises
Normal good
A decrease in input costs will have this effect on supply
It will shift right and increase
If both demand and supply increase, equilibrium quantity does this
Equilibrium quantity increases
A popular TikTok trend makes more people crave apples. Shift or movement, and for which curve(s)?
Demand curve shifts right
When quantity demanded > quantity supplied
Shortage
If buyers expect prices to fall next week, demand will do this today
Demand will decline and shift left
Technological innovation causes the supply curve to do this
Explain what happens to price and quantity when supply increases but demand stays constant
A new law increases the minimum wage, affecting labor costs. Shift or movement, and for which curve(s)?
Leftward shift of supply curve
Surpluses create this type of pressure on prices
Downward pressure
A bakery lowers the price of its muffins and sees sales increase. The local newspaper reports that “demand for muffins is up!” What’s wrong with that headline?
It confuses movement along the curve (due to price drop) with an actual shift in demand
New eco-laws make it harder to produce plastic. What happens to the plastic supply curve?
The supply curve shifts left
An energy drink’s price rises, and at the same time, sugar (an input) becomes cheaper. What changes?
There is upward movement along demand, and the supply curve shifts right
An increase in the price of gasoline affects farming equipment for oranges. Shift or movement, and for which curve(s)?
Leftward shift of the supply curve
Shortages create this type of pressure on prices
Upward pressure
Consumers confuse an increase in quantity demanded with an increase in demand. What key visual or language clue helps them tell the difference?
Quantity demanded = movement along the curve; demand = shift of the entire curve
The price of oil drops AND more efficient drilling tech is invented. What happens to supply?
There is downward movement on the supply curve and it shifts right
A new machine cuts production costs, and the product's own price drops. What moves and/or shifts?
The supply curve shifts right, and there is downward movement along the demand curve
Demand shifts right, but supply shifts left even more. What happens to equilibrium price and quantity?
The price increases and quantity decreases
What does a market graph showing a surplus look like?
The price is above equilibrium and forms a surplus triangle between the demand and supply curves