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Sellers determine___________________.
Law of Demand
The quantity demanded of a good__________ when the price of the good ___________.
Change in Demand
Any change that alters the quantity demanded ______________________________.
A shift in the demand curve, either to the__________ or ___________.
Demand Shifters:
T-
I-
R-
E-
S-
P a g e 1 | 10
Name:______________________________________Date:_____________________Period:_________
Income of Consumers
As income_____________, consumer demand for goods and services _______________ (shifts
to the right).
As income_______________, consumer demand for goods and services ______________ (shifts
to the left).
Substitute OR Complementary?
Cars and Tires- Cereal and Milk-
Corn and Beans- Toast and Jam-
DVD Players and DVDs- Sweatshirts and Sweaters-
Natural Gas and Electricity-
Size of Population/Market
As the ______________ of consumers in a given market increases, ______________increases
(shifts to the right).
As the number of ____________________ in a given market decreases, demand decreases
(shifts to the left).
P a g e 2 | 10
Name:______________________________________Date:_____________________Period:_________
Elasticity of Demand
ELASTIC:
Buyers are __________________________ to price changes.
INELASTIC:
Buyers are _______ responsive to ______________changes.
Elastic or Inelastic?
Sugar- New car-
New furniture- Gasoline-
P a g e 3 | 10
Name:______________________________________Date:_____________________Period:_________
Food- Aspirin-
Encyclopedia- Diet Coke-
2% Milk- Gold Jewelry-
Sailboat- Insulin-
Socks-
Law of Supply
The quantity supplied of a good________ when the price of the good_________.
Changes in Supply
Any change that alters the quantity supplied _______________________.
A _____________ in the ______________ curve, either to the left or right.
Supply Shifters:
T-
I-
G-
E-
R-
S-
P a g e 4 | 10
Name:______________________________________Date:_____________________Period:_________
Technological Advancements
As technology advances, ____________________becomes more efficient and supply increases
(shifts to the right).
International Events/Disasters
When international ___________ (such as wars & revolutions) or natural disasters occur, supply
decreases (shifts to the __________).
Government Intervention
(Taxes, Fees, Regulations, Subsidies)
When a ______, ________, or regulation is imposed on the production of a good or service,
________________ decreases (shifts to the left).
When a _______________ is granted for producers of a good or service, supply increases (shifts
to the right).
Resource Costs
As the _____________________________________ (land, labor, and capital) become more
expensive for the producer to purchase, supply decreases (shifts to the left).
As the factors of production (land, labor, and capital) become ________ expensive for the
producer to purchase, supply increases (shifts to the right).
P a g e 5 | 10
Name:______________________________________Date:_____________________Period:_________
Elasticity of Supply
Measurement of
producers
______________________
to price.
ELASTIC:
Producers are
___________________ to
price changes.
INELASTIC:
Producers are________ responsive to price changes.
Elastic or Inelastic?
Bananas-
Yogurt-
Antiques-
Medical Care-
Putting it all together: EQUILIBRIUM
Equilibrium
_________=_________
If Demand Increases P Q
If Demand Decreases P Q
If Supply Increases P Q
If Supply Decreases P Q
P a g e 6 | 10
Name:______________________________________Date:_____________________Period:_________
Does the event shift the supply (__________) or demand curve (________)?
200 24 1
Airline Tickets Activity
300 16 10
400 10 16
500 4 22
600 0 25
P a g e 7 | 10
Name:______________________________________Date:_____________________Period:_________
P a g e 8 | 10
Name:______________________________________Date:_____________________Period:_________
Farmer invents new picking machine Harvests apples in half the time
P a g e 9 | 10
Name:______________________________________Date:_____________________Period:_________
Price Control
PRICE CEILING:
(Creates a Shortage)
A ________________ price set by the government that consumers are required to pay for a
good or service.
Prevents prices from getting too _______, enabling consumers to______ essential goods or
services they wouldnt be able to ____________ at the equilibrium price.
Example: ___________________
PRICE FLOOR:
(Creates a Surplus)
A ________________ price set by the government that consumers are required to pay for a
good or service.
____________ price up, ensuring that producers _______________ a benefit for providing a
good or service
Example: ___________________________
P a g e 10 | 10