Chapter 3

Question 1

Market

Answer 1

Any place people come together to trade.

Question 2

Demand

Answer 2

The willingness and ability of buyers to purchase different quantities of a good at different prices during a specific period.

Question 3

Law of Demand

Answer 3

As the price of a good rises, the quantity demanded of the good falls, and as the price of a good falls, the quantity demanded of the good rises, ceteris paribus.

Question 4

Demand Schedule

Answer 4

The numerical tabulation of the qty demanded of a good at different prices. A demand schedule is the numerical representation of the law of demand.

Question 5

Demand Curve

Answer 5

The graphical representation of the law of demand.

Question 6

Law of Diminishing Marginal Utility

Answer 6

Over a given period, the marginal (or additional) utility or satisfaction gained by consuming equal successive units of a good will decline as the amount consumed increases.

Question 7

Own Price

Answer 7

The price of a good. For example, if the price of oranges is $1, this is its own price.