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# Supply & Demand

### for Unit 3 Supply and demand review

______________ indicates how much of a product consumers are both willing and able to buy at each possible price given a period of time. Demand
The law of demand states that price and quantity demanded have a(n) ________________ relationship. inverse
As price goes up, the quantity demanded goes _________________ , and as price goes down, the quantity demanded goes ____________. down; up
The three things that explain the law of demand are: (1) substitution effect; (2) income effect; (3) law of diminishing marginal utility
The ______________ effect states that when the price of a product goes up, people will substitute for a cheaper good. substitution
The _______________ effect is when an individual's income can buy more of all goods when the price of one good declines. income
The law of _________________________states that as a person consumes additional units of a good, eventually the utility gained from each additional unit of the good decreases. diminishing marginal utility
A _______________is a table that shows how much of a product consumers demand at various prices. demand schedule
A _______________ is the graphical representation of the law of demand. demand curve
______________ is the amount of product that consumers are willing and able to buy at a specific price. Quantity demanded
The sum of the individual demands of all consumers in the market is called the ______________________________. market demand
Price is always shown on the ________ axis and quantity is always shown on the ________ axis in economics. vertical (y); horizontal (x)
The demand curve slopes _________ and has a _____________ slope. down; negative
The demand for a __________ good increases as money income increases, the demand for an______________ good actually decreases as money income increases. normal; inferior
Products that can be used in place of each other are called __________________. substitutes
Certain goods that are often used in combination are called __________________ . complements
_______ or preferences are your likes and dislikes as a consumer. Tastes
A ________________ along a demand curve is caused by a change in price and results in a change in the quantity demanded. movement
A _________________ of the demand curve is caused by one of the determinants of demand other than price and results in a new demand curve. shift
A change in preferences in favor of a good shifts the demand curve to the __________ . right
An increase in income shifts the demand curve of normal goods to the __________ . right
An increase in income shifts the demand curve for inferior goods to the ___________. left
An increase in income will not cause a shift in either direction of a demand curve for ___________ goods. neutral
With complementary goods, the demand for one good moves in the ___________ direction as the price of the other good. opposite
With substitutes, the demand for one good moves in the_____________direction as the price of the other good. same
Factors that cause a shift in demand: (1)ncome; (2)Tastes; (3) Price of a substitute or price of a complement; (4) Expectations; (5) Size or Composition of the Population
_______ indicates how much of a product producers are both willing and able to sell at each possible price during a given period of time. Supply Supply
The law of supply states that price and quantity supplied have a (n) ____________ relationship. direct
As price goes up, the quantity supplied goes ____________ , and as price goes down, the quantity supplied goes ______________. up; down
Two things that explain the law of supply are: (1) Producers offer more for sale when the price rises because producers are more willing to supply the good; and (2) Higher prices also increase the producerâ€™s ability to supply the good
A ____________________ is a table that shows how much of a product producers supply at various prices. supply schedule
A ______________________ is the graphical representation of the law of supply. supply curve
__________ is the amount of product that producers are willing an able to sell at a specific price. Quantity supplied
The sum of the individual supplies of all producers in the market is called the ______________________. market supply
The supply curve slopes up and has a ______________ slope. positive
Factors that cause a shift in supply are: 1. Cost of resources; 2. Productivity; 3. Changes in technology; 4. Expectations; 5. Number of sellers in the market ; 6. Taxes/subsidies; 7. Government regulations
A _____________________ along a supply curve is caused by a change in price and results in a change in the quantity supplied. movement
A ____________ of the supply curve is caused by one of the determinants of supply other than price and results in a new supply curve. shift
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