Answers2027 Ignite Financial Literacy-Personal Finance - EL3403The Law of Supply and Demand

The Law of Supply and Demand Answers

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Which statement best explains the law of supply?

A
The quantity supplied by producers increases as prices rise and decreases as prices fall.
B
The quantity supplied by producers decreases as prices rise and increases as prices fall.
C
The quantity supplied by consumers increases as prices rise and decreases as prices fall.
D
The quantity supplied by consumers decreases as prices rise and increases as prices fall.
2
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How might a drop in price for washing machines affect the demand for dryers?

A
The demand for dryers would have no relation to the changing prices of washing machines.
B
The demand for dryers would most likely increase as the price for washing machines dropped.
C
The demand for dryers would most likely decrease as the price for washing machines dropped.
D
The demand for dryers would only be affected by an increase in the price of washing machines.
3

A factor that most directly affects the demand for automobiles is

A
the individual tastes and preferences of buyers.
B
the cost of raw materials and natural resources.
C
the availability of workers in automobile factories.
D
a company's ability to respond to buyers' interest.
4

The vertical axis of a demand curve shows

A
the price of a product.
B
the supply of a product.
C
the interest in a product.
D
the production cost of a product.
5

The total amount of a product available in a market at a given price is called the

A
count.
B
demand.
C
number.
D
supply.
6

According to the law of demand, price and quantity move

A
along a track in the same direction.
B
along a track in opposite directions.
C
from different points toward one another.
D
from the same point away from one another.
7

According to the law of supply, price and quantity move

A
along a track in the same direction.
B
along a track in opposite directions.
C
from different points toward one another.
D
from the same point away from one another.
8

The point where supply and demand meet and prices are set is called

A
coordination.
B
correspondence.
C
equality.
D
equilibrium.
9

A market supply schedule shows

A
the products of two companies only.
B
the prices and quantity in an entire market.
C
how prices affect a single producer.
D
how prices affect a group of consumers.
10

Which statement best explains the law of demand?

A
The quantity demanded by consumers increases as prices rise, then decreases as prices fall.
B
The quantity demanded by consumers decreases as prices rise, then increases as prices fall.
C
The quantity demanded by producers increases as prices rise, then decreases as prices fall.
D
The quantity demanded by producers decreases as prices rise, then increases as prices fall.

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2.1 The Law of Supply and Demand