Chapter 4 Micro Test

Question 1

What is an example of a normal good and why

Answer 1

Beer because when i have more money I am going to want to buy more beer

Question 2

What is an example of a compliment good?

Answer 2

Hotdog and ketchup
When the price of a hot dog goes up you want less ketchup

Ketchup is the compliment good

Question 3

Supply Curve

Answer 3

GRAPH that shows price of a good and quantity supplied

Question 4

Compliment

Answer 4

When one good relies on the other then the demand shifts

Question 5

What is an example of an inferior good?

Answer 5

When your income increases your demand for bus rides decreases

Question 6

Competitive Market

Answer 6

When prices are influenced because there are many players in the market

Question 7

Demand Schedule

Answer 7

A TABLE that shows a price of a good and quantity demanded

Question 8

Supply Schedule

Answer 8

The table that shows the price and quantity supplied

Question 9

Quantity Demanded

Answer 9

the amount of product BUYERS want

Question 10

Surplus

Answer 10

When there is too much of something and not enough buyers

Question 11

Quantity Supplied

Answer 11

The amount of a good or service that

SELLERS want to sell

Question 12

Law of Demand

Answer 12

the quantity demanded falls when price goes up

Question 13

Law of Supply and Demand

Answer 13

The idea that a price of a good will adjust based on supply and demand

Question 14

What is an example of a substitute good?

Answer 14

When the price of cream cheese goes up you buy butter

Therefore, Butter is a substitute for cream cheese

Question 15

Substitutes

Answer 15

When the price of one good goes up, then you switch over to competitors

Question 16

Shortage

Answer 16

When there is not enough of a good but people want it

Question 17

Demand Curve

Answer 17

A GRAPH of a relationship between price and quantity demanded

Question 18

Normal Good (Think about what normal actually means)

Answer 18

When income increases demand increases

When income decreases demand decreases

Question 19

Market

Answer 19

A group of buyers and sellers of a good

Question 20

Law of Supply

Answer 20

When the price of a good goes up the quantity supplied goes up

Question 21

Equilibrium

Answer 21

The market price of a good where supply and demand meet

Question 22

Inferior Good (Think of Inverse)

Answer 22

When income increases demand decreases

When income decreases demand increases

Question 23

How do I solve equilibrium equation

Answer 23

Set quantity supplied equal to quantity demanded then solve for price