question
looking at substitutes (like tea and coffee) the rise in price of one item will lead to an (increase/decrease) in the demand of the other item?
answer
increase
question
what happens when the quantity demanded exceeds the quantity supplied there is a....
answer
shortage
question
what naturally happens after there is a shortage of a product
answer
the price and quantity supplied of the product both increases
question
what happens when the demand for a good or service INCREASES?
answer
the equilibrium price and quantity both increase
question
what happens to the equilibrium price and quantity when the demand for a good or service DECREASES?
answer
the equilibrium price and quantity both decrease
question
what happens when supply falls for a product?
answer
the supply curve shifts leftward
question
what does an INCREASE in supply lead to
answer
a FALL in equilibrium price and RISE in equilibrium quantity
question
what does an DECREASE in supply lead to? (with respect to equilibrium price and quantity)
answer
a RISE in equilibrium price and FALL in equilibrium quantity
question
when demand increases and supply decreases, the equilibrium price (rises/falls/is ambiguous) but the change in the equilibrium quantity (rises/falls/is ambiguous)
answer
rises; is ambiguous
question
when demand decreases and supply increases, the equilibrium price (rises/falls/is ambiguous) but the change in the equilibrium quantity (rises/falls/is ambiguous)
answer
falls; is ambiguous
question
when both demand and supply INCREASE, the equilibrium price (rises/falls/is ambiguous) but the change in the equilibrium quantity (rises/falls/is ambiguous)
answer
is ambiguous; rises
question
when both demand and supply DECREASE, the equilibrium price (rises/falls/is ambiguous) but the change in the equilibrium quantity (rises/falls/is ambiguous)
answer
is ambiguous; falls
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