Economics Lecture Review: Supply and Demand

20 Question and Answer flashcards derived from the provided economics lecture notes on supply and demand principles.

What condition describes more units being produced than people want to buy?

Disequilibrium or a surplus.

What happens to the demand or supply curves when there is a change in the product's price?

Neither the demand nor the supply curve shifts.

If the price of a product falls, what happens to the quantity demanded?

The quantity demanded would go up.

If the price of a product falls, what happens to the quantity supplied?

The quantity supplied would go down.

When do demand or supply curves actually shift?

When there's a change in something other than the price of the actual product.

What does a demand curve shifting to the right signify?

An increase in demand.

What does a demand curve shifting to the left signify?

A decrease in demand.

How can you determine the effect on price and quantity after a curve shift using graphs?

Draw the original, draw the shift, and then label the new price and quantity.

If a key resource for producing fidget spinners (like bearings) becomes more expensive, how does it affect the supply curve?

The supply curve would shift to the left (a decrease in supply).

What happens to the price and quantity when the supply curve shifts to the left (decreases)?

The price goes up, and the quantity decreases.

In which direction do both demand and supply curves shift to indicate a decrease?

Always to the left.

In which direction do both demand and supply curves shift to indicate an increase?

Always to the right.

If the price of a substitute product, like fidget cubes, becomes cheaper, what happens to the demand for fidget spinners?

The demand for fidget spinners will fall.

What happens to the price and quantity when the demand for a product falls?

Both the price and quantity will go down.

If fidget spinners and another product are complements, and the demand for the other complement increases, what happens to the demand for fidget spinners?

The demand for fidget spinners would increase.

What is a 'double shift' in economics?

A scenario where both the demand and the supply curves shift at the same time.

When both demand and supply increase simultaneously in a double shift, what happens to the quantity?

The quantity will always go up.

When both demand and supply increase simultaneously in a double shift, what happens to the price?

The price is indeterminate (ambiguous); it might go up, go down, or stay the same.

What real-life product was used as an example of a double shift where both demand and supply increased?

Fidget spinners.

According to the lecture, what was the actual real-life outcome for fidget spinner prices when both demand and supply increased?

The price didn't go up a lot, and eventually became really cheap, because producers increased supply significantly.