Ch. 7-Mkt Equilibrium: Laws of S & D

Question 0

Equilibrium

Answer 0

A state of rest, or balance, due to the equal action of opposing forces or influences; in economics, a situation from which no one has any incentive to change their behavior

Question 1

Market Equilibrium

Answer 1

The intersection of the market demand and the market supply curves at which the quantity demanded equals the quantity supplied

Question 2

Excess Supply

Answer 2

The amount by which quantity supplied exceeds quantity demanded when price is above the equilibrium price

Question 3

Excess Demand

Answer 3

The amount by which quantity demanded exceeds quantity supplied when price is below the equilibrium price

Question 4

Real Price Change

Answer 4

The actual change in a price less the general rate of inflation

Question 5

Marginal Value

Answer 5

The value of the last good consumed by each customer

Question 6

Net Value

Answer 6

At any quantity exchanged in the market, the difference between the total value as perceived by the consumers and the total cost as experienced by the firms

Question 7

Total Market Value

Answer 7

The dollars exchanged between the consumers and the producers in the market, equal to the total expenditures paid by the consumers and the total revenues received by firms

Question 8

Consumer Surplus

Answer 8

At any quantity exchanged in the market, the difference between the total value to consumers and the total market value

Question 9

Producer Surplus

Answer 9

At any quantity exchanged in the market, the difference between the total market value and the total cost of production