1. The desires of what two groups fuel a market economy? 2. In a market economy, what two forces interact to determine price?
3. Explain the four parts of the definition of demand.
4. If the price of a good or service goes up, what happens to demand
and supply?
5. If the price of a good or service goes down, what happens to demand
and supply?
6. Explain equilibrium price, surplus, and shortage and describe the
relationship between them.
7. What are three factors that affect demand?
8. Explain what happens to supply and why it happens under the
following circumstances
a. An increase in the number of suppliers
b. A decrease in the cost of production
c. A number of suppliers leave the market.
9. How does price answer the three basic economic questions (what to
to produce, for whom to produce) in a market economy?