Chapter 4: Demand and Supply (The Basics)

entire curve

Changes in demand are when the ________ would shift upwards or downwards.

Income effect

________: when prices are low, people are easily able to afford it since their budget would allow it.

Subsidies

________ are the opposite of taxes and help reduce price per unit.

price movement

Change is the quantity demanded only occurs due to change in ________ along the curve.

equilibrium price

When demand is constant and only supply decreases, ________ and quantity increases.

Substitution effect

________: when products price increase, they tend to increase in relative to other products.

surplus

A(n) ________ would only exist when the quantity supplied is greater than the quantity demanded.

Shift

________ in supply is due to the determinants of supply.

direct relation

The law of supply states that when prices increase, the supply increases as well (________)

Taxes

________ are added up to the unit cost of production, thus making it more expensive.

Goods

________ are usually categorized into 2 types, inferior and normal.

Consumer expectation

________ pays a major role in the determination of the price.

equilibrium price

When supply is constant and only demand decreases, ________ and quantity decreases.

equilibrium price

When demand is constant and only supply increases, ________ and quantity decreases.

equilibrium price

When supply is constant and only demand increases, ________ and quantity increases.