Demand Reading Questions

1. Define - Demand Schedule

2. Define - Demand Curve

3. How do the demand schedule and demand curve relate to each other?

4. What does the law of demand state?

5. What is the difference between an individual and a market demand?

6. Define Diminishing Marginal Utility

7. Give an example of Diminishing Marginal Utility (Not the example in the reading)

8. What is the difference between elastic and inelastic demand?

9. What is the term for a product that is often used with another product? In place of another product?

10. If butter and margarine are substitute goods, what happens to the demand for butter as the price of margarine rises?

11. What does it mean when a demand curve shifts to the left? To the right?

Supply and Market Reading Questions

1. How does supply differ from demand?

2. What does the law of supply state?

3. How does the incentive of greater profits affect the quantity supplied?

4. How does the price of a product affect the quantity offered for sale?

5. In which direction does the supply curve shift when supply decreases? In which direction does the supply curve shift when supply increases?

6. What determines whether a business's supply curve is elastic or inelastic? Is supply elastic or inelastic in a situation where the price of books rises 10 percent and the quantity supplied rises 15 percent?

7. Why does new technology shift the supply curve to the right?

8. If there is a surplus of a good, what should happen to the price?

9. If there is a shortage of a good, what should happen to the price?

10. How does the market come to an equilibrium price?

11. If the government sets the minimum wage at $15 per hour, up from $7.25, what would the result be?

12. Explain the advantages of the pricing system.