Your task is to complete all assigned questions to the best of your ability.
- In two or more sentences define, the Law of Supply? Keeping all the factors constant, the price and the quantity of product supplied in a market are related to each other, when the price of a product rises, the quantity supplied also increases to try to maximize profits.
- In two or more sentences define, the Law of Demand? Keeping all the factors constant, the price and the quantity of product demanded are inversely related to each other, that is when the price of a product rises its demand in the market decreases.
- Identify at least 4 determinants of supply?
Technological Advancements, Number of Sellers in the Market, Price of the inventory, Production cost.
- Identify at least 4 determinants of demand?
Choices and Preferences, Product creditability/ quality, Product expectation, Price of the product002Ecxdfgrtyghb
- In two or more sentences explain how the equilibrium point is determined?
When the quantity of a product demanded in the market equals to the quantity of the product supplied in the market. This is maintained by raising or lowering price depending on changes in supply or demand
The graph below was constructed by using the values in the table as references.
| Quantity Demanded | Quantity Supplied | Price |
| 110 | 10 | 1 |
| 100 | 20 | 2 |
| 90 | 30 | 3 |
| 80 | 40 | 4 |
| 70 | 50 | 5 |
| 60 | 60 | 6 |
| 50 | 70 | 7 |
| 40 | 80 | 8 |
| 30 | 90 | 9 |
| 20 | 100 | 10 |
| 10 | 110 | 11 |
- If Joshua has an increase in income, would the supply curve or demand curve shift and in which direction or would there be movement along the demand curve? Please explain in one to two sentences.
An increase in income would result in an increased demand for goods and services. The demand curve shifts to the right as a result of increased demand and the purchasing power.
- If taxpayers are given a tax credit for the purchase of electric automobiles, please illustrate on the graph given below a shift in the supply or a shift in demand curve for electric automobiles. Please state whether price will increase or decrease and whether quantity will increase or decrease.
The quantity demanded will increase. Increased tax credit to taxpayers increases their purchasing power. This results in an increased demand and will shift the demand curve to the right. The prices of automobiles will ultimately decrease.
- If agricultural subsidies were cut, please illustrate on the graph below the direction or movement of the supply or demand curve. Please state whether the price will increase or decrease and whether quantity
will increase or decrease.
Cutting agricultural subsidies will cause the supply curve to shift to the left due to the reduced supply of goods and services. The prices of agricultural goods will increase ultimately reducing the demand for those particular goods.
- If tastes increase and taxes decrease, please illustrate the direction or movement of the supply and demand curves and state whether price will increase, decrease, or remain at the same level and state whether quantity will increase, decrease, or remain at the same level.
With Increased tastes and tax decrease, there will be a relative increase in the demand for the same. This will boost the purchasing power of the consumers, ultimately increasing the demand significantly. The supply curve and the demand curve will both shift to the right due to favorable factors of production and reduced prices.
- If input costs decrease and income decrease by the same proportion, please illustrate the direction or movement of the supply and demand curves and state whether price will increase, decrease, or remain at the same level and state whether quantity will increase, decrease, or remain at the same level.
If input costs and income decrease, this will lead to a decrease in production costs and consumer purchasing power. Ultimately, the supply and demand curve won’t change because the positive effects of decreased input costs and the negative effects of income decreasing. The reduction of purchasing power reduces the demand for goods and services. While the decrease in input costs decreases the price of goods.
