If the price goes up, the quantity demanded goes down (but demand itself stays the same). If the price decreases, quantity demanded increases. This is the Law of Demand. On a graph, an inverse relationship is represented by a downward sloping line from left to right.
What happens when the price of a good is below the equilibrium price?
If the price is below the equilibrium level, then the quantity demanded will exceed the quantity supplied. Excess demand or a shortage will exist. If the price is above the equilibrium level, then the quantity supplied will exceed the quantity demanded. Excess supply or a surplus will exist.
Why do you use Unit 3 economics flashcards?
A. To show when the amount supplied intersects with the amount demanded B. To indicate how much profit producers make from each level of supple C. To graph the relationship between quantity supplied and price charged D. To track the progress of production from raw materials to finished product.
When do consumers start using less of a good?
D. Consumers start using less of a good because more substitutes are available. C Which of the following most accurately describes how the equilibrium price of a good or service can be determined?
Which is inferior, the opportunity cost or the benefit?
Inferior When the benefit of one particular use of a resource is greater than the opportunity cost, then that resource is which of the following? A. Being used efficiently B. Non-excludable C. A normal good D. not scarce A Which of the following best describes the difference between individual and public goods?
How to calculate the maximum price in economics?
A. By taking the opposite of the columns in a supply schedule and a demand schedule B. By moving the supply curve right or left until it matches the demand curve C. By doing market research to determine the maximum price consumers will pay D. By finding where the supply curve and the demand curve intersect.
