CH 3

Question 1

other things being equal

Answer 1

ceteris paribus

Question 2

goods that are often used together so that consumption of one good tends to enhance consumption of the other

Answer 2

complements

Question 3

the extra benefit consumers receive from buying a good or service, measured by what the individuals would have been willing to pay minus the amount that they actually paid

Answer 3

consumer surplus

Question 4

the loss in social surplus that occurs when a market produces an inefficient quantity

Answer 4

deadweight loss

Question 5

the relationship between price and the quantity demanded of a certain good or service

Answer 5

demand

Question 6

a graphic representation of the relationship between price and quantity demanded of a certain good or service, with quantity on the horizontal axis and the price on the vertical axis

Answer 6

demand curve

Question 7

a table that shows a range of prices for a certain good or service and the quantity demanded at each price

Answer 7

demand schedule

Question 8

the situation where quantity demanded is equal to the quantity supplied; the combination of price and quantity where there is no economic pressure from surpluses or shortages that would cause price or quantity to change

Answer 8

equilibrium

Question 9

the price where quantity demanded is equal to quantity supplied

Answer 9

equilibrium price

Question 10

the quantity at which quantity demanded and quantity supplied are equal for a certain price level

Answer 10

equilibrium quantity

Question 11

at the existing price, the quantity demanded exceeds the quantity supplied; also called a shortage

Answer 11

excess demand

Question 12

at the existing price, quantity supplied exceeds the quantity demanded; also called a surplus

Answer 12

excess supply

Question 13

the resources such as labor, materials, and machinery that are used to produce goods and services; also called inputs

Answer 13

factors of production

Question 14

a good in which the quantity demanded falls as income rises, and in which quantity demanded rises and income falls

Answer 14

inferior good

Question 15

the resources such as labor, materials, and machinery that are used to produce goods and services; also called factors of production

Answer 15

inputs

Question 16

the common relationship that a higher price leads to a lower quantity demanded of a certain good or service and a lower price leads to a higher quantity demanded, while all other variables are held constant

Answer 16

law of demand

Question 17

the common relationship that a higher price leads to a greater quantity supplied and a lower price leads to a lower quantity supplied, while all other variables are held constant

Answer 17

law of supply

Question 18

a good in which the quantity demanded rises as income rises, and in which quantity demanded falls as income falls

Answer 18

normal good

Question 19

what a buyer pays for a unit of the specific good or service

Answer 19

price

Question 20

a legal maximum price

Answer 20

price ceiling

Question 21

government laws to regulate prices instead of letting market forces determine prices

Answer 21

price control

Question 22

a legal minimum price

Answer 22

price floor

Question 23

the extra benefit producers receive from selling a good or service, measured by the price the producer actually received minus the price the producer would have been willing to accept

Answer 23

producer surplus

Question 24

the total number of units of a good or service consumers are willing to purchase at a given price

Answer 24

quantity demanded

Question 25

the total number of units of a good or service producers are willing to sell at a given price

Answer 25

quantity supplied

Question 26

when a change in some economic factor (other than price) causes a different quantity to be demanded at every price

Answer 26

shift in demand

Question 27

when a change in some economic factor (other than price) causes a different quantity to be supplied at every price

Answer 27

shift in supply

Question 28

at the existing price, the quantity demanded exceeds the quantity supplied; also called excess demand

Answer 28

shortage

Question 29

the sum of consumer surplus and producer surplus

Answer 29

social surplus

Question 30

a good that can replace another to some extent, so that greater consumption of one good can mean less of the other

Answer 30

substitute

Question 31

the relationship between price and the quantity supplied of a certain good or service

Answer 31

supply

Question 32

a line that shows the relationship between price and quantity supplied on a graph, with quantity supplied on the horizontal axis and price on the vertical axis

Answer 32

supply curve

Question 33

a table that shows a range of prices for a good or service and the quantity supplied at each price

Answer 33

supply schedule

Question 34

at the existing price, quantity supplied exceeds the quantity demanded; also called excess supply

Answer 34

surplus