SUPPLY AND DEMAND REVIEW

1.        Explain the law of supply using a graph on the your paper

2.        Explain the law of Demand using a graph on your paper

3.        What is an inelastic good? Explain why it is inelastic

4.        What conditions lead to a surplus?

5.        What is an elastic good?  Give an example.

6. What is the point called where supply and demand intersect?

7. Graph an increase in demand and a decrease in supply

8. Explain how the “price of inputs” affects supply

9. Explain how demand changes due to the income effect

10. Explain how demand is affected by the complementary effect.

11. What is a demand schedule?

12.     Goods that have no substitute are what types of demand?

13. Name 4 reasons why supply changes

14. What happens to price if there is a decrease in supply?

15. What happens to price if there is an increase in supply and a decrease in demand?

16.     What 4 things will cause a demand curve to shift?

17.     How can future price affect current demand?

18.     How is elasticity determined?

19.     What is a price floor?  Give an example.

20.     What is a price ceiling?  Why would the government implement this?

Graph the change that would take place for each of the following scenarios.

21.     There is an expectation of higher future prices of all goods for consumers.

22.     Incomes rise for all consumers, what happens to demand for Top Ramen?

23.     The government decides to tax a good heavily.

24.     Foreign producers are now allowed to compete with domestic products.

25.     Producers anticipate higher future prices.