Chapter 3

Question 1

Markets may be-

Answer 1

Local
National
International
Price is discovered in the interactions of buyers and sellers

Question 2

Demand

Answer 2

Series of possible prices during specified periods of time

Demand schedule (table) or demand curve (graph)
Amount consumers are willing and able to purchase at a given price assuming:
-Other things equal
-Individual demand
Market demand

Question 3

Law of demand:

Answer 3

Other things equal, as price falls, the quantity demanded rises, and as the price rises the quality demanded falls

Explanations:
-Law of diminishing marginal utility **
-Income effect** and substitution effect
-Price acts as an obstacle to buyers