Supply, Demand, and Pricing Intervention

Directions:
Use your textbook, Economics: A New Way of Thinking to answer the following
questions.
You may check out a book for this assignment or download chapters from the
Class Web Site: http://msgentrynep.weebly.com
DUE 1 Week after you pick-up and sign for your intervention.
Chapter 4: Demand
Section 1: Understanding Demand
What Is Demand?
1.
What are the two sides of a market and what are they commonly referred to as?
(p. 90)
2.
What two aspects must be present in order for demand to exist? (p. 90)
What Does the Law of Demand Say?
3.
If the price of a good increases, according to the law of demand what happens to
the quantity demanded of the good? (p. 91)
4.
In what direction do price and quantity demanded move? (p. 91)
5.
Demand and quantity demanded are different. What does quantity demanded
refer to? (p. 91)
6.
If Karen buys two bags of popcorn for $5 a bag, what is the quantity demanded?
(p. 91)
Why Do Price and Quantity Demanded Move in Opposite Directions?
7.
Using the law of diminishing marginal utility, if a person uses more of a product,
what will happen? (p. 91)
8.
Which law does the law of diminishing marginal utility affect? (p. 91)
The Law of Demand in Numbers and Pictures
9.
What does a demand schedule use to show the law of demand? (p. 92)
10.
What does a demand curve use to show the law of demand? (p. 93)
Individual Demand Curves and Market Demand Curves
11.
How is an individual demand curve different from a market demand curve? (p.
93)
Section 2: The Demand Curve Shifts
When Demand Changes, the Curve Shifts
12.
What does it mean when we say the demand curve shifts? (p. 95)
13.
How does the demand curve move when demand increases or decreases? (p. 95)

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What Factors Cause Demand Curves to Shift?

Income
14.
If income and demand move in opposite directions, what type of good is this? (p.
96)
15.
If income changes but the demand does not change, what type of good is this? (p.
96)
16.
If income and demand move in the same direction, what type of good is this? (p.
96)
Preferences
17.
How do a persons preferences affect the demand curve? (p. 97)
Prices of Related Goods
18.
What are the two types of related goods? (p. 97)
19.
What are substitutes? (p. 97)
20.
What are complements? (p. 97)
Number of Buyers
21.
What happens to the demand of a good if there are more buyers? (p. 97)
22.
If there are fewer buyers for a good, what happens to the demand? (p. 97)
23.
What is one factor that may cause the number of buyers to increase and what is
another factor that may cause the number of buyers to decrease? (p. 97)
Future Price
24.
How does future price affect the current demand? (p. 97)
What Factor Causes a Change in Quantity Demanded?
25.
What one factor can cause a change in quality demanded and how is the change
shown? (p. 98)
Section 3: Elasticity of Demand
What Is Elasticity of Demand?
26.
Elasticity of demand deals with the relationship between what two factors? (p.
102)
27.
Elasticity of demand is also a way of measuring what? (p. 102)
Elastic Demand
28.
What is elastic demand? (p. 102)
Inelastic Demand
29.
What is inelastic demand? (p. 103)
Unit-Elastic Demand

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30.

What is unit-elastic demand? (p. 103)

Elastic or Inelastic?
31.
What are some products with elastic demand? (p. 103)
32.
What are some products with inelastic demand? (p. 103)
What Determines Elasticity of Demand?
Number of Substitutes
33.
What is an example of a good with few substitutes? (p. 103)
34.
What is an example of a good with many substitutes? (p. 103)
Luxuries Versus Necessities
35.
What is a necessary good? Give an example. (p. 104)
36.
What is a luxury good? Give an example. (p. 104)
37.
For each example given of a necessary good and a luxury good, determine
whether the demand is elastic or inelastic. (p. 104)
Percentage of Income Spent on the Good
38.
How does the buyers reaction to a price change affect the demand for a good?
(p.104)
Time
39.
How does time affect a buyers reaction to a good and the demand for a good? (p.
104)
Chapter 5: Supply
Section 1: Understanding Supply
What Is Supply?
1.
What is supply? (p. 112)
What Does the Law of Supply Say?
2.
What does the law of supply say? (p. 112)
3.
What is the direct relationship between price and quantity supplied? (p. 112)
4.
What is quantity supplied? (p. 113)
The Law of Supply in Numbers and Pictures
5.
What relationship does the supply schedule illustrate? (pp. 113114)
6.
What is a supply curve? (p. 115)
A Vertical Supply Curve
7.
In what instance does the law of supply not hold true? (p. 155)
8.
Give an example of a good with a vertical supply curve. (p. 115)
A Firms Supply Curve and a Market Supply Curve

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9.
What is the difference between a firms supply curve and a market supply curve?
(p. 115)
Section 2: The Supply Curve Shifts
When Supply Changes, the Curve Shifts
10.
What does it mean to say that the supply curve shifts? (p. 117)
11.
What happens when the supply increases? Decreases? (pp. 117119)
What Factors Cause Supply Curves to Shift?
12.
What factors cause a supply curve to shift? (p. 119)
Resource Prices
13.
Why is it that when prices fall or rise, sellers are able to produce more or less of a
good? (p. 119)
Technology
14.
How has technology changed over time? (p. 119)
15.
What does advancement in technology mean? (p. 119)
16.
What is a per-unit cost? (p. 119)
Taxes
17.
How do some taxes increase the per-unit costs? (p. 119)
18.
What happens to the supply curve when tax is added, and also when the tax is
eliminated? (p. 119)
Subsidies
19.
What is a subsidy? (p. 120)
20.
What happens to the supply curve when a subsidy is added or eliminated? (p. 120)
Quotas
21.
What are quotas? (p. 120)
22.
What happens to the supply curve when a quota is added or eliminated? (p. 120)
Number of Sellers
23.
What happens to the supply curve if more sellers produce a particular good? (p.
120)
24.
What happens to the supply curve if fewer sellers produce a particular good? (p.
120)
Future Price
25.
Describe the concept of future price. (p. 120)
Weather (in Some Cases)
26.
In what ways can weather hurt or help the supply of an agricultural and
nonagricultural good? (p. 120)

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What Factor Causes a Change in Quantity Supplied?

27.
What factor causes a change in quantity supplied? (p. 121)
Elasticity of Supply
28.
What is the notion of elasticity of supply? (pp. 122123)
29.
What is elastic supply? (p. 123)
30.
How is inelastic supply different from elastic supply? (p. 123)
Chapter 6: Price: Supply and Demand Together
Section 1: Supply and Demand Together
Moving to Equilibrium
1.
What is a surplus? (p. 130)
2.
What is a shortage? (pp. 130131)
3.
When is a market in equilibrium? (p. 131)
4.
What is an equilibrium quantity? (p. 131)
5.
What is a good's equilibrium price? (p. 131)
Why Does Price Fall When a Surplus Occurs?
6.
What are inventories? (p. 131)
7.
Why does price fall when a surplus occurs? (p. 131)
Why Does Price Rise When There Is a Shortage?
8.
What makes a price rise when a shortage exists? (p. 131)
What Causes Equilibrium Prices to Change?
9.
What would cause an equilibrium price to change? (p. 132)
Demand Changes Cause Changes to Equilibrium Price
10.
How does the equilibrium price change when demand for a good increases or
decreases? (pp. 134136)
Supply Changes Cause Changes to Equilibrium Price
11.
How does the equilibrium price change when supply for a good increases or
decreases? (p. 136)
Changes in Supply and in Demand at the Same Time
12.
What happens to the equilibrium price if demand increases more than supply? (p.
137)
13.
If supply increases more than demand? (p. 137)
Does It Matter if Price Is at Its Equilibrium Level?
14.
If all markets are in equilibrium, what does that mean for shortage and surplus?
(p. 137)

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Price Is a Signal
15.
How does price provide information and act as a signal? (p. 137)
What Are Price Controls?
16.
What is a price ceiling? (p. 138)
17.
What is a price floor? (p. 138)
Price Controls and the Amount of Exchange
18.
How are people better off without price controls? (p. 139)
Section 2: Supply and Demand in Everyday Life
Why the Long Lines for Concert Tickets?
19.
Why do concerts have long lines for tickets when places like the grocery store do
not? (pp. 140141)
The Differences in Prices for Candy Bars, Bread, and Houses
20.
Explain why the price of candy bars stays relatively the same, yet the price of
houses differs dramatically from place to place. (pp. 141142)
Supply and Demand at the Movies
21.
Why do the prices for movie tickets vary from a Tuesday afternoon to a Friday
night? (p. 143)
Supply and Demand on a Freeway
22.
How do supply and demand work on a freeway? (pp. 143145)
Supply and Demand on the Gridiron
23.
What is the price players have to pay when there is a shortage in the football team
market? (p. 146)
Supply and Demand on the College Campus
24.
How do supply and demand change the entrance levels at two different colleges?
(p. 146)
Necessary Conditions for a High Income: High Demand, Low Supply
25.
In order to obtain a high income, what needs to happen? (pp. 146147)

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