Econ 201 - Supply and Demand Quiz

What shifts the demand curve?

Change in income/wealth, change in price/availability of substitute goods, change in price/availability of complementary goods, change in tastes

What happens to the demand curve if income increases(normal goods)?

Demand increases

What happens to the demand curve if income decreases(normal goods)?

Demand decreases

What happens to the demand curve if income increases(inferior goods)?

Demand decreases

What happens to the demand curve if income decreases(inferior goods)?

Demand increases

What happens to the demand curve if price/availability of a substitute good increases?

Demand increases

What happens to the demand curve if price/availability of a substitute good decreases?

Demand decreases

What happens to the demand curve if price/availability of a complementary good decreases?

Demand increases

What happens to the demand curve if price/availability of a complementary good increases?

Demand decreases

If the cost of producing an item decreases what happens?

Supply shifts out(supply increases)

If the cost of producing an item increases what happens?

Supply shifts in(supply decreases)

If the demand increases and the supply increases what happens to the quantity and price?

Quantity goes up; Price is unknown

If the demand increases and the supply decreases what happens to the quantity and price?

Quantity goes down; Price goes up

If the demand decreases and the supply increases what happens to the quantity and price?

Quantity is unknown; Price goes down

If the demand decreases and the supply decreases what happens to the quantity and price?

Quantity goes down; Price is unknown