Study Guide 6-7     back

Lesson 6: Supply and Demand

 

The market economy operates on the basis of ___________________________________

 

If there is no _____________________ you will go out of business.

 You must produce what you can _______________.

 

You lose money if __________________________________________________________

 

State the Law of Supply:

 

 

Supply is ______________________________________________________

 

State the Law of Demand:

 

 

Demand is ______________________________________________________________

 

The supply curve tells us:

 

 

What decisions do consumers make? What decisions do producers make?

 

 

A demand curve shows:

 

 

How is an increase or decrease in demand shown in a graph? In supply?

 

 

 

 

 

Lesson 7: What is the price?

 

Everything you buy has____________________________________________

Price indicates the ______________________________________________

 

The cost of production includes:

 

A profit is______________________________________________________

 

What is the law of demand?

 

What does the demand curve on 484 tell and show us? Be specific!

 

 

What does the supply curve on p.484 tell and show us?

 

 

An equilibrium point is where _____________________________________

______________________________________________________________

Define surplus:_________________________________________________

Why would there be a surplus?

 

When would there be a shortage?

How does change in demand or supply affect price? Be specific.