Study Guide for Supply and Demand Quiz!

Supply and Demand

Study Guide

Study Assistants – You have these items to help you study.
Chapter 3 in your economics book - case study and info...
Calling all Babysitters article and questions
Supply and Demand homework - what is Demand?
Supply and Demand homework - what is Supply?
Terms to Understand

Supply    Elastic Demand        Inelastic Demand
Law of Demand      Law of Supply      Profit Motive
Demand


Concepts to Understand and other Things to Know

Directions: These should be answered as if they were short answer questions on the Big Test. Use your own paper to answer these in detail – so you feel confident you know it!

-What three conditions must be present in order for demand to exist?
-Economists say demand is like a rubber band – explain. What determines if it stretches or not?
-What are production costs? Are there different types? What affect do production costs have on supply? Give examples.
-Explain how the level of supply for a good or service could be changed. What are the ways in which this may happen?
-Explain how the level of demand for a good or service could be changed. What are the ways in which this may happen?
-What kind of an affect do shortages and/or surpluses have upon the prices of goods or services?
-What is important to a Producer? What most concerns a Producer?
-Identify the major factor that could influence a change in demand for a good. How and what would it affect?
-With your knowledge of supply and demand – how can you explain the rise and fall of stock prices?
-Do you understand the main idea in the article Calling All Babysitters? Explain then…
-When there is a want or need for a good/service and people are willing to pay but not able, how does a producer (business) create the ability to pay – thus increasing demand?
What are some factors that could change the level of demand for a good or service?

What are some factors that could change the level of supply for a good or service?

You own many different automobile dealerships. You decide to bring the price down on the new hybrid vehicles on your lots. You want to sell these and get them out of your stores. After the sale prices come out, you still don’t sell many. Demand for these hybrid vehicles is ____________________________.

Why would a gold mine filled with gold be closed down?

What do all business owners worry the most about? (what they must take into account – hint)