18 flashcards · Shared on 19 August 2026 by AtomAI Library
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What is demand in a market?
The quantities consumers are willing and able to buy at different prices over a period
What is demand in a market?
The quantities consumers are willing and able to buy at different prices over a period
According to the law of demand, what usually happens when a good's price rises, other factors remaining constant?
Quantity demanded falls
What does a supply curve show?
The quantities producers are willing and able to sell at different prices
According to the law of supply, a rise in price will usually cause what change, other factors remaining constant?
An increase in quantity supplied
Market equilibrium occurs where:
quantity demanded equals quantity supplied
What is the likely result when the market price is above the equilibrium price?
A surplus because quantity supplied exceeds quantity demanded
If the market price is below equilibrium, which situation occurs?
Quantity demanded exceeds quantity supplied
Which change causes a movement along a demand curve rather than a shift of the curve?
A change in the good's own price
Which event is most likely to shift the supply curve for bread to the left?
An increase in the cost of flour
For a normal good, how does an increase in consumer income affect demand, other factors remaining constant?
Demand shifts to the right
Tea and coffee are substitutes. What is likely to happen to the demand for tea if the price of coffee rises?
Demand for tea increases
Printers and ink cartridges are complementary goods. What is likely to happen to demand for ink cartridges if printer prices rise substantially?
Demand for ink cartridges decreases
A new production technology lowers firms' unit costs. What is the most likely market effect?
Supply shifts to the right
Demand increases while supply remains unchanged. What normally happens to equilibrium price and quantity?
Price rises and quantity rises
Supply increases while demand remains unchanged. What normally happens to equilibrium price and quantity?
Price falls and quantity rises
A binding price ceiling is set below the market equilibrium price. What is its most likely direct effect?
A shortage of the good
A binding price floor is set above the market equilibrium price. What is its most likely direct effect?
A surplus because supply exceeds demand
What does consumer surplus measure?
The difference between what consumers are willing to pay and what they actually pay