Chapter 7 Study Guide

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Supply and Demand Test Study Guide
Chapter 7 Section 1
Law of Demand
Law of Diminishing Marginal Utility
Chapter 7 Section 2
Demand Curve
Demand Schedule
Determinants of Demand
 Change in Population
 Change in Income
 Change in Tastes and Preferences
 Substitute Goods
 Complimentary Goods
Price Elasticity of Demand
Elastic Demand
Inelastic Demand
Chapter 7 Section 3
Law of Supply
Supply Curve
Supply Schedule
Determinants of Supply
 Price of Inputs
 Number of Firms
 Taxes
 Technology
Chapter 7 Section 4
Equilibrium Price
Shortage (also know/understand when they
Surplus (also know/understand when they
Market Forces
Price Controls
 Price Ceilings (Define and graph an
 Price Floors (Define and graph an
Other Information from chapter 7
 Be able to distinguish between the
difference in a change in demand and
quantity demanded (same goes for
supply and quantity supplied).
o You should be able to recognize
on a graph the difference between
a change in demand vs change in
quantity demanded (and supply vs
change in quantity supplied)
 Be able to explain and identify changes
in supply and demand.
o Be able to explain the possible
cause of the change
o Be able to explain the result of the
 Be prepared to graph supply and
demand curves as well as labeling the x
and y axis. You should also be able to
show the equilibrium price and quantity
and be able to show how a change in
supply and/or demand would affect the
equilibrium price and quantity.
Chapter 1 and 2
The factors of production
The 3 economic questions
Market (Capitalist) Economy
Command (Socialist) Economy
Mixed Economy
Opportunity Cost