Supply and Demand: Economics Crash Course #4

Available at https://youtu.be/g9aDizJpd_s or just youtube/google “Crash Course Economics 4”

1. A market is any place where buyers and sellers meet to

_______________ goods and services. The key to markets
is the concept of ________________________ exchange.

2. What are price signals?

3. In the space to the right, re-create the

Supply and Demand graph. Label
all the elements of the graph appropriately.

a. The Law of Demand states that

when the price goes up, people
buy _____________; when the
price goes down, people buy
_____________.

b. The ______________________
is shown by an upward sloping
supply curve on the graph.

c. What’s the difference between a surplus and a shortage?

d. When supply equals demand, the price is called the _________________________

______________ and the quantity is called the ____________________________
___________________.

4. What are the four potential market behaviors?

a. How does the Supply and Demand graph (based on market

behaviors) explain why gasoline became cheaper in 2014?

5. What’s an example where the market approach would not be appropriate? Why?