Unit 2 Study Guide – Economics
Principles of Supply and Demand: Chapters 4-6
Definitions and examples
Chaper 4
market
Name _____________________
Hour _____
Central Questions
Chaper 4
1.) Graph and Label the Demand Curve (demand, price, quantity)
demand
2.) Factors that cause shifts in the Demand Curve (INEPT)
1.
law of demand
2.
3.
4.
quantity demanded
5.
3.) The one factor or variable that causes a movement along the demand
curve is _______________ (aka a change in quantity demanded)
law of diminishing marginal
utility
demand curve
Chaper 5
4.) Graph and Label the Supply curve (supply, price, quantity)
5.) Factors that cause shifts in Supply (WIGNET)
1.
2.
normal good
3.
4.
inferior good
5.
6.
neutral good
6.) The one Factor or variable that causes a movement along the supply
curve is _______________ (aka a change in quantity supplied)
Chaper 6
7.) Why do free markets move to equilibrium?
substitute
8.) What happens when there is a Shortage?
complement
9.) What happens when there is a Surplus?
Chaper 5
supply
10.) How may sellers deal with extra inventory?
law of supply
11.) Graph all on one graph (Supply, Demand, Surplus, Shortage,
Equilibrium)
supply curve
subsidy
12.) Graph Price Ceiling / Price Floor
quota
2
Chaper 6
surplus
13.) What happens when a govt. tries to control prices? Ex.
Command/Socialism
shortage
equilibrium
14.) Graph 2 Situations or events that cause changes in Equilibrium Quantity
and Price (supply changes or shifts vs demand changes or shifts)
equilibrium quantity
price ceiling
price floor
3