Economics_1_chapter_3b_homework_Spring 2013.doc

Economics_1_chapter_3b_homework_Spring 2013.doc - Economics...

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Economics 1 Name Shayla Kadow Chapter 3, Homework 1. Define the Law of Demand and the Law of Supply . Explain how each curve illustrates the related law. Law of demand is when you do not change the price of the item. But you also do not change the quality or quanity. Law of supply is as the price of the good or service rises the quanity supplied rise 2. Surpluses and shortages are temporary conditions in freely operating markets. Explain what causes each and how these temporary conditions resolve themselves in markets. Surplus could be do to a price increase causing extra of products. Shortage would be from a drop in price therefore they fly off shelves 3. Explain the difference between change in quantity demanded and change in demand; change in quantity supplied and change in supply . How would you represent each change graphically ? List the nonprice determinants that shift demand and supply? 4. Explain how each of the following would cause demand or supply to shif and how the equilibrium price and
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