Write the word that is being described on each of the following sentences.

1.It is a situation where Quantity supplied = quantity demanded.

2.It occurs when QD > QS.

3.It occurs when QS > QD.

4.Graphically, the intersection of supply and demand.

5. The price that causes quantity supplied to equal quantity demanded.

6.The numerical quantity (supplied and demanded) at the equilibrium price. When the demand
increases, the equilibrium price and quantity increases, as a result, the graph shifts to the _________.

7.When the Supply increases, the equilibrium price declines and equilibrium quantity increases, as a
result, the graph shifts to the _________.

8.When the demand increases, the equilibrium price and quantity increases, as a result, the graph shifts
to the _________.

9.When the demand decreases, the equilibrium price and quantity decreases, as a result, the graph
shifts to the _________.

10. When the supply decreases, the equilibrium price increases and equilibrium quantity
decreases, as a result, the graph shifts to the ___.

TEST II: TRUE OR FALSE

Write T if the statement is true and F if False.

1.Supply refers to the quantity of goods that a seller is willing to offer for sale.

2.Supply Function shows the different quantities the seller is willing to sell at various prices.

3.Supply Schedule shows the dependence of supply on the various determinants that affect supply.

4.Supply Curve is a graphical illustration of the supply schedule, with the price measured on the vertical
axis(Y) and the quantity supplied measured on the horizontal axis (X).

5.Demand is the willingness of a consumer to buy a commodity at a given price.

6.Demand Schedule shows the various quantities the consumer is willing to buy at various prices.

7.Demand Function shows how the quantity demanded of a good depends on its determinants.

8.Demand Curve is a graphical illustration of the demand schedule, with the price measured on the
vertical axis (Y) and the quantity demanded measured on the horizontal axis (X).

9.Substitution Effect is felt when a change in the price of a good changes consumer’s real income or
purchasing power, which is the capacity to buy with a given income.

10.Income Effect is felt when a change in the price of a good changes demand due to alternative
consumption of substitute goods.