Question

1. referring to graph a, the p2 price occurred because of: a) a change in demand b) change in supply c) change in supply & change in demand
2. referring to graph a, the price was highest with the: a) s1 and d1 curves b) s1 and d2 curves c) s2 and d1 curves
3. if the government was trying to protect consumers from spending too much for a necessity, the government could: a) set a price ceiling b) set a price floor c) change the substitutes
4. if the government established new regulations and higher wage laws, the government would: a) set a price ceiling b) cause a change in supply c) change quantity of demand
5. a decrease in the popularity of a product will a) decrease the quantity of its supply b) cause firms to produce more at higher prices c) decrease the demand for a product
6. a supply line demonstrates a a) negative b) positive c) ceiling relationship between price and quantity because they both increase
7. a surplus means that there is more: a) products than people who want to buy it b) buyers than there is of the product supplied c) substitutes and compliments are equal
8. this graph shows a change in quantity of demand because it shows a: a. change in price b. change in supply c. compliment good
9. this change of demand might be because: a. its complimentary good became popular b. its substitute became popular c. it is luxury item

extra credit: write the essay on the back of the scantron. explain why the demand curve slopes down

Explanation:

1. In Graph A, P2 price change is due to change in supply as one of the supply curves has shifted.
2. The highest price occurs at the intersection of S1 and D1 curves as they position each other for a higher - value equilibrium.
3. To protect consumers from high prices of a necessity, the government can set a price ceiling which is a maximum price.
4. New regulations and higher wage laws can cause a change in supply as they affect production costs and conditions.
5. A decrease in product popularity leads to a decrease in demand for the product as consumers' preferences change.
6. A supply line demonstrates a positive relationship between price and quantity as producers are willing to supply more at higher prices.
7. A surplus means there are more products than people who want to buy it, i.e., quantity supplied exceeds quantity demanded.
8. The graph shows a change in quantity of demand because it shows a change in price which causes movement along the demand curve.
9. The change of demand might be because its substitute became popular as consumers switch to the substitute.

Answer:

1. b) change in Supply
2. a) S1 and D1 curves
3. a) set a price ceiling
4. b) cause a change in Supply
5. c) decrease the Demand for a product
6. b) Positive
7. a) products than people who want to buy it
8. a. change in price
9. b. its substitute became popular