NAME____________________________________
DATE__________________________
ECONOMICS – REVIEW FOR TEST – CHAPTERS 4 AND 5 SUPPLY AND DEMAND
FILL IN THE BLANKS.
1. There are 3 characteristics that define demand. A person must have the ________________,
_______________________, and perhaps most importantly the _______________________, to
purchase a product.
2. A LIST of the number of items paired with prices at which they will be purchased is the demand
_________________.
3. A GRAPH of the number of items paired with prices at which they will be purchased is the demand
_________________.
4. The _________ ____ _____________________ states that _____________________ varies
________________________ with prices. Or, in other words, as price goes __________,
_______________ goes down.
5. Utility describes the _____________________ and ______________________ we derive from the
purchase of a particular product. If we buy a second unit of the same product there is more utility
attached to that product. This is known as the _________________ _________________ and
explains why we are willing to buy more of a product at lower prices. However, as we buy more
and more our level of satisfaction goes down which is known as ___________________
__________________ _________________. This explains the Law of Demand which states that as
______________ goes up, demand goes _______________.
6. The amount of a product that will be purchased at any given price is the __________________
______________________. When drawing the demand curve, each point on the line represents a
___________________ ____________________. If we move from point A to point B on the
demand curve this represents a _______________ ___ _________________ ________________.
This only happens when there is a change in _______________. This can be influenced by the
______________ ______________ which involves consumers having more money to spend due to
prices changing, or it can be influenced by the _________________ ________________ in that
consumers might purchase more of a comparable item when prices for the first item rise.
7. If the TOTAL AMOUNT of demand changes (due to several factors) then we say that the demand
curve has _________________. As a result the entire line moves to the _________ or _________.
8. Several factors can cause a _____________ in the line:
a. Consumer _______________ (increase or decrease due to recession/depression, raising
minimum wage, etc.)
b. Consumer _______________ (fads, fashions, etc.)
c. ___________ (increase due to costs, prices change for substitutes or complements)
d. ______________________ (what consumers thing might happen in the future)
e. ____________ of consumers (population increases due to immigration, or opening a trade
agreement with another country, etc.)
9. The amount available at all possible prices is the ________________. In other words it is the
amount that _______________________ are willing to provide.
10. The Law of Supply states that as ____________ go up, ___________ of a product will be supplied.
NAME____________________________________
DATE__________________________
11. Just like demand a LIST of number of items supplied at each price is a _____________________,
while a GRAPH of number of items supplied at each price is a _____________________, and a
SINGLE point on the graph represents ___________________ ____________________.
12. Several factors can cause a shift in the supply curve:
a. ____________ of inputs
b. __________________ (workers morale, natural disasters, accidents, etc.)
c. __________________
d. __________________ (passing taxes, providing __________________, or imposing
__________________)
e. __________________ (what producers think might happen in the future)
f. _______________ of sellers
13. When the demand curve and the supply curve are drawn together on one graph, they make the
shape of _________. The point where the two lines intersect is known as the __________________
____________. Any point above the intersection represents a ______________ (because there is
more supply than demand) and any point below the intersection is a ___________________
(because demand is greater than supply).
14. Supply is a result of production of products. There are three factors of production:
______________ _________________, ______________ _________________, and
______________ _________________.
15. Producers have to take into consideration their own costs of producing a product. Costs that do not
change, such as payments for machinery, mortgage, etc., and are paid regularly are known as
_____________ ________________. This is usually referred to as the _____________________
for the factory or business. There are costs that change with rate of production, such as electric
usage and cost of raw materials – these are known as ____________________ _____________.
Together these two categories make up __________________ ________________ and must be
taken into account when determining if a profit will be made.
16. Practice: Create a SUPPLY and DEMAND graph using the following schedule of values: (Label the
schedules AND label the axis of the graph.)
PRICE
QUANTITY
PRICE
QUANTITY
10
400
10
250
20
375
20
275
30
350
30
300
40
325
40
325
50
300
50
350
60
275
60
375
70
250
70
400