1.7 Market Equilibrium

• What is demand composed of according to economics?

  Quantity Demanded and Price
• Match the feature with its corresponding concept:

  Definition of Demand ↔️ The willingness and ability to buy a product at various prices

  Definition of Quantity Demanded ↔️ The amount purchased at a specific price
• The Law of Supply states that as the price of a good decreases, the quantity supplied increases, assuming all other factors remain constant.

  False
• The Law of Supply states that as the price increases, the quantity supplied increases.
• What is the relationship between price and quantity supplied according to the Law of Supply?

  Direct
• What does the Law of Demand state about the relationship between price and quantity demanded?

  Inverse
• As the price of a good increases, the quantity demanded decreases according to the Law of Demand.


  True
• What is the term for the point where the demand and supply curves intersect?

  Market equilibrium
• If the demand and supply curves for laptops intersect at a price of $800 and a quantity of 1000 laptops, what is the equilibrium quantity?

  1000 laptops
• The relationship between Quantity Demanded and Price is governed by the Law of Demand
• The Law of Supply states that as the price of a good increases, the quantity supplied increases.


  True
• Consumer preferences and purchasing power drive the inverse relationship between price and quantity demanded.


  True
• The quantity supplied is represented by a single point on the supply curve.


  True
• The point where the demand curve and supply curve intersect is called the equilibrium
• What are the characteristics of market equilibrium?

  No surplus or shortage
• What effect does a shortage have on the equilibrium price?

  Increases
• What happens to the equilibrium price if supply increases?

  Decreases
• The Law of Demand states that as the price of a good increases, the quantity demanded also increases, assuming all other factors remain constant.

  False
• Quantity Supplied refers to the amount producers are willing to sell at a particular price
• What is the relationship between price and quantity demanded according to the Law of Demand?

  Inverse
• Match the concept with its relationship to price:

  Demand ↔️ Inverse relationship

  Supply ↔️ Direct relationship
• The Law of Supply assumes that all other factors besides price remain constant.


  True
• Demand is the willingness and ability of consumers to purchase a product at various prices
• As the price of a good increases, the quantity supplied increases according to the Law of Supply.


  True
• Market equilibrium determines the equilibrium price and equilibrium quantity
• What is the specific amount of a product that consumers are willing to buy at a particular price called?

  Quantity Demanded
• Match the feature with the correct concept:

  Willingness to buy at various prices ↔️ Demand

  Amount purchased at a specific price ↔️ Quantity Demanded
• The relationship between Quantity Supplied and Price is governed by the Law of Supply
• The willingness and ability of producers to sell a product at various prices is called supply
• The Law of Demand states that as the price of a good increases, the quantity demanded decreases
• If the price of apples increases from $1 to $2 per pound, farmers might produce more apples to sell at the higher price.

  True
• The market equilibrium is the point where quantity demanded equals quantity supplied.


  True
• A surplus occurs when quantity supplied exceeds quantity demanded, which decreases the price.


  True
• An increase in demand leads to a higher equilibrium price and quantity.


  True
• Quantity Demanded refers to the amount consumers are willing to buy at a specific price
• What are the two key components of supply in economics?

  Quantity Supplied and Price
• Match the feature with its corresponding concept:

  Definition of Supply ↔️ The willingness and ability of producers to sell a product at various prices

  Definition of Quantity Supplied ↔️ The amount producers are willing to sell at a specific price
• The Law of Demand states that as the price of a good decreases, the quantity demanded increases, assuming all other factors remain constant.


  True
• The Law of Supply states that as the price decreases, the quantity supplied decreases.
• What does the Law of Supply state about the relationship between price and quantity supplied?

  Direct