supply/demand curves Worksheet Week 1

Topics: Supply and demand, Economics terminology, Microeconomics Pages: 2 (263 words) Published: November 10, 2014
University of Phoenix Material

Supply and Demand Curves

Answer the following questions

Write the definition for each of the following:

1. Law of Demand
Demand is the “wants” that consumers are willing to pay for. The quantity demanded is related to price.

As the price falls people demand more, if the price rises people demand less.

People may want many things, however only what they are willing to purchase is demand. It is important to realize the other variables that affect demand, for example, the law of demand is stated if all things are constant, according to Colander (2013). Some variables that affect demand are disposable income, weather, and people’s taste.

2. Law of Supply

According to Colander (2013) supply is more complicated than demand.

The law states that quantity supplied rises when the price rises, and falls when the price falls.

The supply is related to opportunity cost. The suppliers want to produce more when prices rise as this means higher profit. The law of supply is based on the ability of an organization to substitute one good for another. For example, in the winter in cold areas people buy boots, so a shoe company would not sell very many sandals. The company would have to produce boots to supply the goods to the demanding consumers.

Which of the following graphs best demonstrates the law of demand?

a) I
b) II
c) III
d) IV

Which of the following graphs best demonstrates the law of supply?

a) I
b) II
c) III
d) IV

References:

Colander, D. C. (2013). Microeconomics (9th ed.). New York, NY: McGraw-Hill.

References: Colander, D. C. (2013). Microeconomics (9th ed.). New York, NY: McGraw-Hill.
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Demand Curve and Supply Curve Essay
  • Supply and Demand and Demand Curve Essay
  • Supply and Demand and Demand Curve Essay
  • Essay on Supply and Demand and Demand Curve
  • Supply and Demand and Demand Curve Essay
  • Supply and Demand and Aggregate Supply Curve. Essay
  • Supply and Demand and Aggregate Demand Curve Essay
  • Supply and Demand Curves Essay

Become a StudyMode Member

Sign Up - It's Free