1.1 Competitive Markets: Demand and Supply

Quiz by Hayle Short, created more than 1 year ago

Book: Economics for the IB Diploma Study and Revision Guide (Hodder) Standards: Nature of Markets Law of Demand Demand Curve Nonprice Determinants of Demand Shifts Along Demand Curve Linear Demand Functions Law of Supply Supply Curve Non-price determinants of Supply Equilibrium/changes to Equilibrium Equilibrium Linear Equations Resoure Allocation Consumer Surplus Producer Surplus Allocative Efficiency

	Created by Hayle Short over 5 years ago

1.1 Competitive Markets: Demand and Supply

Question 1 of 19

Scarcity is not a requirement for a market to exist.

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Explanation

Question 2 of 19

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The law of demand states that the for a good or service falls as its rises. The demand curve shows an relationship between these.

Explanation

Question 3 of 19

Three Causes of Negative Relationship between Price and Quantity Demanded

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Question 4 of 19

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Effect: As price falls, the real income of consumers rises.

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Question 5 of 19

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Effect: As the price of a good or service falls, more customers are able to pay, so they are more likely to buy the product.

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Question 6 of 19

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: As people consume more of a particular good or service, the utility gained from the marginal unit declines, so customers will only purchase more at a lower price.

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Question 7 of 19

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Non-Price Determinants of Demand (HIS AGE) H: I: S: A: G: E:

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Question 8 of 19

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The demand for goods rises with an increase in income. The demand for goods rises with a decrease in income.

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Question 9 of 19

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A price rise will cause a in the quantity demanded for the product. A price fall will cause an in the quantity demanded.

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Question 10 of 19

Qd = a - bP where (a) is demand, irrespective of price and (-b) is the slope of the demand curve

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Question 11 of 19

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The Law of Supply states there is a positive relationship between the of the Product and its .

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Question 12 of 19

Supply is the willingness and ability of firms to provide a good or service at a given price level, per time period.

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Question 13 of 19

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A in supply is caused by changes in non-price factors that affect supply. A in supply is caused only by changes in price.

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Question 14 of 19

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Non-Price Determinants of Supply (SWATCH) S: W: A: T: C: H:

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Question 15 of 19

Qs = c + dP where (c) is the slope and (+d) is the supply, irrespective of price.

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Question 16 of 19

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The signaling function incentive function( signaling function, incentive function ) of price tells producers whether to enter or leave the market.

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Question 17 of 19

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Which is the consumer and producer surplus?

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Question 18 of 19

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Label the production possibility curve (PPC).

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Question 19 of 19

With allocative efficiency, no one can be made better off without making someone worse off.

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Explanation

Non-Price Determinants of Demand (HIS AGE)
H:
I:
S:
A:
G:
E:

Non-Price Determinants of Supply (SWATCH)
S:
W:
A:
T:
C:
H:

The ( signaling function, incentive function ) of price tells producers whether to enter or leave the market.