Chapter 2: Economics

Question 1

Microeconomics

Answer 1

The study of small economic units, such as individual consumers, families, and businesses.

Studies human choices and resource allocation

Question 2

Why are microeconomics important for companies?

Answer 2

Microeconomic information is important for companies because their survival is dependent on selling enough products to cover their costs and earning profits.

It is important for consumers who need to make choices based on the prices and availability of the goods and services they need.

Question 3

Demand

Answer 3

willingness and ability of buyers to purchase goods and services at different prices.

Question 4

Supply

Answer 4

the amount of goods and services for sale at different prices.

Question 5

Economics

Answer 5

a social science that analyzes the choices people and governments make in allocating scarce resources.

Balance between what we want and what we can afford

Question 6

Demand Curve

Answer 6

a graph of the amount of product that buyers will purchase at different prices.

Greater quantity purchased for lower price point