Question:
1.
2.
3.
4.
5.
In two or more sentences define, the Law of Supply?
In two or more sentences define, the Law of Demand?
Identify at least 4 determinants of supply?
Identify at least 4 determinants of demand?
In two or more sentences explain how the equilibrium point is
determined?
The graph below was constructed by using the values in the table as
references.
Quantity Demanded Quantity Supplied Price
110
10
1
100
20
2
90
30
3
80
40
4
70
50
5
60
60
6
50
70
7
40
80
8
30
90
9
20
100
10
10
110
11
6. If Joshua has an increase in income, would the supply curve or demand
curve shift and in which direction or would there be movement along
the demand curve? Please explain in one to two sentences.
7. If taxpayers are given a tax credit for the purchase of electric
automobiles, please illustrate on the graph given below a shift in the
supply or a shift in demand curve for electric automobiles. Please state
whether price will increase or decrease and whether quantity will
increase or decrease.
8. If agricultural subsidies were cut, please illustrate on the graph below
the direction or movement of the supply or demand curve. Please state
whether the price will increase or decrease and whether quantity
will increase or decrease.
9. If tastes increase and taxes decrease, please illustrate the direction or
movement of the supply and demand curves and state whether price
will increase, decrease, or remain at the same level and state whether
quantity will increase, decrease, or remain at the same level.
10.
If input costs decrease and income decrease by the same
proportion, please illustrate the direction or movement of the supply
and demand curves and state whether price will increase, decrease, or
remain at the same level and state whether quantity will increase,
decrease, or remain at the same level.
Additonal Info :
he Law of Supply suggests as prices increase, quantity increases, as well. Or
as prices decrease, quantity decreases, too. There is a direct relationship
between price and quantity.
A change in quantity supplied implies there is movement from one point on
the supply curve to another point on the supply curve.
A change in supply implies that the entire supply curve shifts to either the left
or the right.
To determine, which direction the curve will shift, please refer to the following
determinants of supply:
•
•
•
•
•
•
Input costs
Taxes
Subsidies
Technologies
Other goods
Other sellers
The Law of Demand suggests as prices increase, quantities decrease and as
prices decrease, quantities increase. There is an inverse relationship between
price and quantity.
A change in quantity demanded implies there is movement from one point on
the demand curve to another point on the demand curve.
A change in demand implies the entire demand curve will shift to either the
left or the right.
To determine, which direction the curve will shift, please refer to the following
determinants of demand:
•
•
•
•
•
•
Income
Tastes
Preferences
Other goods
Expectations
Other buyers
A market consists of both buyers and sellers. The equilibrium point is
determined by the intersection of the supply and demand curve, which will
dictate the equilibrium quantity and price.
The graph below was constructed by using the values in the table as
references.
Quantity Demanded Quantity Supplied Price
110
10
1
100
20
2
90
30
3
80
40
4
70
50
5
60
60
6
50
70
7
40
80
8
30
90
9
20
100
10
10
110
11
From the graph given above the equilibrium price is $6.00 and the
equilibrium quantity is 60 units.
Joshua receives a substantive increase in price, please illustrate on the
graph given below a shift in the supply or a shift in demand curve. Please
state whether price will increase or decrease and whether quantity will
increase or decrease.
The demand curve will shift. Price and quantity will both increase.
If agricultural subsidies were cut, please illustrate on the graph below the
direction or movement of the supply or demand curve. Please state whether
the price will increase or decrease and whether quantity will increase or
decrease.
The supply curve will shift to the left. Price will increase and quantity will
decrease.
If expectations increase and taxes decrease, please illustrate the direction or
movement of the supply and demand curves and state whether price will
increase, decrease, or remain at the same level and state whether quantity
will increase, decrease, or remain at the same level.
The supply and demand curves will both shift to the right. Price will be
indeterminate (unchanged) and quantity will increase.
If input costs increase and income increases by the same proportion, please
illustrate the direction or movement of the supply and demand curves and
state whether price will increase, decrease, or remain at the same level and
state whether quantity will increase, decrease, or remain at the same level.
Demand curve will shift to the right and the supply curve will shift to the left.
Price is indeterminant (unchanged) and price will increase.
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