LSUS MHA ECON 705 - MODULE 1 ACCURATE ANSWERS
Law of Demand
Accurate Answer - consumers buy more of a good when its price decreases
and less when its price increases
Law of Supply
Accurate Answer - producers offer more of a good as its price increases and
less as its price falls
Normal goods
Accurate Answer - Goods for which demand goes up when income is higher
and for which demand goes down when income is lower.
quantity demanded
Accurate Answer - the amount of a good or service that a consumer is willing
and able to purchase at a given price
demand curve
Accurate Answer - a graph of the relationship between the price of a good and
the quantity demanded
What is the reason why the quantity demanded of a good increase when its
price falls?
Accurate Answer - lower price increases the real incomes of buyers, enabling
them to buy more.
surplus
Accurate Answer - A situation in which quantity supplied is greater than
quantity demanded
shortage
Accurate Answer - A situation in which quantity demanded is greater than
quantity supplied
Factors that shift the demand curve
Accurate Answer - 1. income
2. price of related goods
3. expectations of future prices
Law of Demand
Accurate Answer - consumers buy more of a good when its price decreases
and less when its price increases
Law of Supply
Accurate Answer - producers offer more of a good as its price increases and
less as its price falls
Normal goods
Accurate Answer - Goods for which demand goes up when income is higher
and for which demand goes down when income is lower.
quantity demanded
Accurate Answer - the amount of a good or service that a consumer is willing
and able to purchase at a given price
demand curve
Accurate Answer - a graph of the relationship between the price of a good and
the quantity demanded
What is the reason why the quantity demanded of a good increase when its
price falls?
Accurate Answer - lower price increases the real incomes of buyers, enabling
them to buy more.
surplus
Accurate Answer - A situation in which quantity supplied is greater than
quantity demanded
shortage
Accurate Answer - A situation in which quantity demanded is greater than
quantity supplied
Factors that shift the demand curve
Accurate Answer - 1. income
2. price of related goods
3. expectations of future prices
