Chap 3 Vocab (Quiz 3)

Question 1

Factors of production

Answer 1

labor, materials, and machinery that are used to produce goods and services (imputs)

Question 2

Inputs

Answer 2

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

Question 3

Shift in supply

Answer 3

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

Question 4

Price ceiling

Answer 4

a legal maximum price

Question 5

Price control

Answer 5

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

Question 6

Price Floor

Answer 6

a legal minimum price

Question 7

Elasticity

Answer 7

concept that measures responsiveness of one variable to changes in another variable

Question 8

Elastic demand

Answer 8

when the elasticity of demand is greater than one, indicating a high responsiveness of quantity demanded or supplied to changes in price

Question 9

Elastic supply

Answer 9

when the elasticity of either supply is greater than one, indicating a high responsiveness of quantity demanded or supplied to changes in price

Question 10

Inelastic demand

Answer 10

when the elasticity of demand is less than one,

Question 11

Inelastic supply

Answer 11

when the elasticity of supply is less than one,

Question 12

Price elasticity of demand

Answer 12

percentage change in the quantity demanded of a good or service divided the percentage change in price

Question 13

Price elasticity of supply

Answer 13

percentage change in the quantity supplied divided by the percentage change in price

Question 14

Unit elastic demand

Answer 14

change in product price causes an equal and proportional change in the quantity demanded

Question 15

Perfectly elastic demand

Answer 15

see infinite elasticity

Question 16

Perfectly inelastic demand

Answer 16

Ed = 0.

Question 17

Perfectly elastic supply

Answer 17

Es = Infinity

Question 18

Perfectly Inelastic Supply

Answer 18

Es = 0