Chapter 4 Lecture Quiz – Flashcards
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The unique point at which the supply and demand curves intersect is called
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equilibrium
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In any economic system, scare resources have to be allocated among competing uses. Market economies harness the forces of
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supply and demand to allocate scare resources
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An increase in quantity demanded
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results in a movement downward and the right along a demand curve
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At the equilibrium price, the quantity of the good that buyers are willing and able to buy
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exactly equals the quantity that sellers are willing and able to sell
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A decrease in the price of a good will
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decrease quantity supplied
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Anther term for equilibrium price is
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market-clearing price
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The law of demand states that, other things equal, when the price of a good
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falls, the quantity demanded of the good rises
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Which of the following events use cause equilibrium price to rise?
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Demand increases and supply decreases
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If the demand for a product increases, then we would expect equilibrium price
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and equilibrium quantity both to increase
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The law of supply states that, other things equal, when the price of a good
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rises, the quantity supplied of the good rises
