Demand and Supply

1. When economists talk about prices, what are they interested in?

2. Demand is a relationship between which two variables?

3. When price increases, what does quantity demanded do?

4. In what direction do demand curves slope? Why?

5. When price increases, what does quantity supplied do?

6. In what direction do supply curves slope? Why?

7. Why is it that supply and demand can be illustrated on the same graph?

8. What point occurs where supply and demand meet and what does it tell us?

9. What is it called when the price of a good or service is too high? What will occur in the market to reach equilibrium?

10. What is it called when the price of a good or service is too low? What will occur in the market to reach equilibrium?

11. What does Ceteris Paribus mean?

12. When there is a shift in demand, what is happening in a market?

13. What 6 factors shift demand?

14. What 4 factors shift supply?

15. Describe the 4 step process of shifting supply or demand to find a new equilibrium.

16. Explain the difference between the movement of a demand (or supply) curve and movement along a demand (or supply) curve.

17. How can government step in and control prices?

18. What can price ceilings cause?

19. What can price floors cause?

20. What ways can buyers and sellers get around price controls?

21. What is an alternative to price controls?

22. How are consumer, producer, and social surplus measured?

23. When does dead weight loss occur?