Supply and Demand Fundamentals
An 11th-grade social studies worksheet covering the basic principles of supply and demand, market equilibrium, and factors influencing shifts in curves.
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Supply and Demand Fundamentals
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Read each question carefully and provide your best answer based on your understanding of supply and demand principles.
1. Which of the following best describes the law of demand?
As price increases, quantity supplied increases.
As price increases, quantity demanded decreases.
As income increases, demand for a normal good decreases.
As technology improves, supply decreases.
2. What happens to the equilibrium price and quantity when there is an increase in consumer income for a normal good, assuming all other factors remain constant?
Equilibrium price increases, equilibrium quantity decreases.
Equilibrium price decreases, equilibrium quantity increases.
Equilibrium price and quantity both increase.
Equilibrium price and quantity both decrease.
3. The point where the quantity demanded equals the quantity supplied is known as market .
4. A factor that can cause an entire supply curve to shift to the right is an improvement in .
5. If the price of a substitute good decreases, the demand for the original good will .
6. An increase in the cost of production will shift the supply curve to the right.
True
False
7. A change in consumer tastes that makes a product more popular will cause a movement along the demand curve, not a shift.
True
False
8. Explain the difference between a change in quantity demanded and a change in demand.
9. Describe how a government subsidy to producers would affect the supply curve for a good.
10. Analyze the provided supply and demand graph. Identify the equilibrium price and quantity. Then, predict what would happen to the equilibrium if a new substitute product entered the market.