- Define demand. What does the law of demand state? Express it in words, in symbols (clip art or images), and as a graph.
- Define supply. What does the law of supply state? Express it in words, in symbols (clip art or images), and as a graph.
- Discuss the five factors that cause demand curves to shift and give a specific example of each one.
- Describe the five factors that shift the supply curve and what causes a movement along the supply curve.
- What does it mean when a supply curve shifts to the left? Shifts to the right? Compare a shift of the curve to a movement along the curve.
- Define elasticity of demand and describe how it is calculated; give examples of elastic and inelastic goods.
- Describe equilibrium three ways: in words, with symbols, and as a labeled graph.
- Describe how price acts as a signal in the marketplace to buyers and sellers.
Sample Solution
Demand is an economic term that refers to the quantity of a good or service that consumers are willing and able to purchase at a given price. The law of demand states that as the price of a good or service increases, the quantity demanded by consumers will decrease; conversely, as prices decrease, the quantity demanded will increase.