Chap 2 & 3 Vocab (Quiz 2)

Question 1

Allocative efficiency

Answer 1

when the mix of goods produced represents the mix that society most desires

Question 2

Productive efficiency

Answer 2

the economic concept of producing the largest possible output from the available resources in an economy

Question 3

Demand curve

Answer 3

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

Question 4

Demand schedule

Answer 4

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

Question 5

Demand

Answer 5

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

Question 6

Equilibrium price

Answer 6

the price where quantity demanded is equal to quantity supplied

Question 7

Equilibrium quantity

Answer 7

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

Question 8

Equilibrium

Answer 8

the situation where quantity demanded is equal to the quantity supplied

Question 9

Law of Demand

Answer 9

higher prices lead to lower demand of a certain good or service and lower prices lead to higher quantity demanded, while all other variables are held constant

Question 10

Law of Supply

Answer 10

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

Question 11

Price

Answer 11

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

Question 12

Quantity demanded

Answer 12

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

Question 13

Quantity supplied

Answer 13

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

Question 14

Shortage

Answer 14

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

Question 15

Supply curve

Answer 15

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

Question 16

Supply schedule

Answer 16

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

Question 17

Supply

Answer 17

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

Question 18

Surplus

Answer 18

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