Chapter 3

Question 1

the willingness and ability of purchasers to buy goods or services

Answer 1

demand

Question 2

the willingness of producers and merchandisers to provide goods and services

Answer 2

supply

Question 3

the prevailing price for a specific good or service at a particular time in a given market

Answer 3

market price

Question 4

the number of “units” of a specific good or service sold in a given market during a particular period

Answer 4

market quantity sold

Question 5

the relationship between two variables when an increase in one is associated with an increase in the other variable

Answer 5

positive (or direct) relationship

Question 6

the supply of one particular seller

Answer 6

individual supply

Question 7

the supply from all sellers in a particular market

Answer 7

market (or aggregate) supply

Question 8

a table showing the relationship between price and quantity supplied

Answer 8

supply schedule

Question 9

a curve indicating the quantities that sellers are willing to supply at various prices

Answer 9

supply curve

Question 10

movement along a supply curve in response to a price change

Answer 10

change is quantity supplied

Question 11

a Latin phrase that means “other things equal” or “all else constant”

Answer 11

ceteris paribus

Question 12

a shift of the entire supply curve, in response to something changing other than price

Answer 12

change in supply

Question 13

any factor that affects the quantity supplied other than the price of the good or service offered for sale

Answer 13

nonprice determinants of supply

Question 14

a table showing the relationship between price and quantity demanded

Answer 14

demand schedule

Question 15

a curve indicating the quantities that buyers are willing to purchase at various prices

Answer 15

demand curve

Question 16

the relationship between two variables if an increase in one is associated with a decrease in the other variable

Answer 16

negative (or inverse) relationship

Question 17

the demand from all buyers in a particular market

Answer 17

market (or aggregate) demand

Question 18

the demand of one particular buyer

Answer 18

individual demand

Question 19

movement along a demand curve in response to a price change

Answer 19

change in the quantity demanded

Question 20

a shift of the entire demand curve in response to something changing other than price

Answer 20

change in demand

Question 21

any factor that affects the quantity demanded, other than the price of the good or service being demanded

Answer 21

nonprice determinants of demand

Question 22

a good that can be used in place of another good

Answer 22

substitute good

Question 23

a good that is used along with another good

Answer 23

complementary good

Question 24

a situation in which the quantity that sellers are prepared to sell at a particular price exceeds the quantity that buyers are willing to buy at that price

Answer 24

surplus

Question 25

a situation in which the quantity demanded at a particular price exceeds the quantity that sellers are willing to supply

Answer 25

shortage

Question 26

a situation in which the quantity supplied equals the quantity demanded, and thus there is no pressure for change in price or quantity bought or sold

Answer 26

market equilibrium

Question 27

the theory that market forces will tend to make shortages and surpluses disappear

Answer 27

theory of market adjustment

Question 28

a situation of either shortage or surplus

Answer 28

market disequilibrium

Question 29

a method of setting prices in which the seller adds a fixed percentage amount to his or her costs of production

Answer 29

markup (or cost-plus) pricing

Question 30

describes something that is exact (though it may be unrealistic)

Answer 30

precise

Question 31

describes something that is correct (even if only in a general way)

Answer 31

accurate