chapter 3

Question 1

market

Answer 1

any arrangement that lets buyers + seller to get info and do business with each other

Question 2

competitive market

Answer 2

which has buyers + many sellers that come together to sell standerided products

Question 3

all markets involve

Answer 3

demand, supply, price and qaunity

Question 4

demand

Answer 4

is a schedule or curve that shows diff amounts that are consumers are willing and able to purchase at every possible prices during a particular time period

Question 5

quanity demand

Answer 5

Quantity demand of a good is the amount that the consumers plan to buy during a particular time period and at a particular price

Question 6

subsiution effect

Answer 6

when price of good/service inc–> so people find other substitutes which results in a dec in quantity demanded of that good/service

Question 7

income effect

Answer 7

when price of good/service inc relative to income–> so people cant afford the stuff they’d usually buy, this leads to a dec in quantity of that good/service

Question 8

demand vs demand curve

Answer 8

demand- the entire relationship between the price of good and qaunity demanded of good

demand curve- shows how much of a good people want to buy at diff prices, assuming all other factors influencing buying desions r constant

Question 9

explaing this:

Consumption is subject to diminishing marginal utility

Answer 9

Explanation- The more u consume of something the less value it gives u from consuming another unit

Question 10

willingness to pay measures

Answer 10

mariginal benefit

Question 11

a substitute

Answer 11

a good that can be used in place of another good

Question 12

a complement and ex

Answer 12

a good thats used alongside another good

ex: When price of a substitute for an energy bar goes up (or when price of complement of an energy barr falls) → demand for energy bars increase

Question 13

inferior good

Answer 13

as ur income inc the demad for this good dec

Question 14

normal good

Answer 14

demand inc for this good as income inc

Question 15

supply

Answer 15

curve that shows diff amounts of a good that producers are willing and able to make alible for sale at a diff prices during a specific time period

Question 16

qaunity supplied

Answer 16

the quaity/amount that producer plan to sell at specific price during specific time

Question 17

law of supply

Answer 17

inc price=inc in quantity bc this will make more revenue

producers are gonna supply goo donly if they ca cover least the marginal cost for making it

Question 18

marekt demanded vs market supplied grpah

Answer 18

demand- shows quanity of good consumers wanna buy at diff prices

supplied - shows qunity producers wanna sell/supply stuff at diff prices

Question 19

for a supply curve as qaunity inc…

Answer 19

marginal cost inc bc addiontal units of productions are needed which means the price of each good/unit inc too

Question 20

change in supply

Answer 20

happpens wen stuff outisde of price changeing influences selling plans which leads to shift in supply curve

Question 21

factors that change supply of good

Answer 21

changes in the prices of factors of production, related goods purchased,
substitutes in production,
complements in production.

Question 22

How does a change in supply impact the supply curve?

Answer 22

inc/dec in supply shift supply curve to right/left

this means there’s also a change in quantity supplied at diff prices

Question 23

equilbrium point

Answer 23

quantity demanded equals quantity supplied ( aka the market clearing price)

Question 25

shortage

Answer 25

price below equlibrium price

Question 26

surplus

Answer 26

price above equlibrium price

Question 27

compptetive market generates _______ and ___ _ efficiency

Answer 27

productive and allocative