Chapter 4 Flashcards
What determines the price and the quantity produced of most goods?
The interaction of supply and demand
When a consumer is able and willing to buy a good or service, he or she creates which of the following?
Demand
What are inferior goods?
Goods for which the demand falls when income rises
How is future price related to current demand?
If the price is expected to rise, current demand will rise
What determines how a change in prices will affect total revenue for a company?
Elasticity of demand
What kind of system is the United States economy based on?
Market
Ceteris paribus, or “all other things held constant,” is an assumption that has which of the following effects
It takes only prices to account.
What shows the quantities if products demanded at each price by all consumers in a market?
A market demand schedule
What kind of table lists the quantity of a good thy a person will buy at different prices?
Demand schedule
What is he basic principal of the law of demand?
When a good’s price is lower, people will buy more of it.
How is the current demand for a good related to its future price?
If the price is expected to drop, current demand will fall.
Which of he following is a good that might not be bought when prices rise?
Luxury
What kind of changes would be expected in the demand of a country that has a growing population?
A rise in the demand for shelter
What is a company’s total revenue?
The amount a company receives for selling it’s goods
When prices rise, which of the following happens to income?
It buys less
