ACT SSC Economics — Unit 1
Supply and Demand — Flashcards & Quiz
Supply and demand underpin every price in a market economy. ACT SSC Economics Unit 1 expects you to draw and interpret demand and supply curves, distinguish movements along from shifts, and explain equilibrium and disequilibrium. Strong responses apply the model to real markets — housing, labour, petrol — and use accurate diagrams with clearly labelled axes, curves and equilibria.
Key Points
- Law of demand: price down, quantity demanded up (ceteris paribus). Downward-sloping demand curve.
- Law of supply: price up, quantity supplied up. Upward-sloping supply curve.
- Equilibrium: where Qd = Qs. Shortage below, surplus above equilibrium.
- Movement along vs shift: price change = movement; any other factor = shift of the whole curve.
- Demand shifters: income, taste, prices of related goods, expectations, population.
- Supply shifters: input costs, technology, regulation, expectations, number of producers.
Common Mistakes to Avoid
- Confusing a movement along a curve with a shift of the curve.
- Forgetting to label both axes (P vertical, Q horizontal) on every diagram.
- Mixing up substitute and complement effects in demand shifts.
- Saying "price is too high, so demand falls" — that's a movement along, not a demand shift.
- Drawing curves without showing initial and new equilibria clearly.
Exam Strategy
ACT SSC Unit 1 supply and demand questions usually ask you to diagram a market change and explain the effect on price and quantity. Method: (1) identify the market and the change, (2) decide whether it shifts demand, supply or both, (3) draw labelled before-and-after diagrams, (4) state the new equilibrium direction, (5) explain the economic reasoning. Diagrams carry marks — always label axes, curves and equilibria.
Revision Tip
Demand and supply shifters and the movement-vs-shift distinction are classic recall — drill them on Revizi and sketch diagrams from memory for exam-speed accuracy.
Last updated: March 2026