Chapter IV "The Market Forces of Supply and Demand"

Question 1

These determine the quantity of an item sold and the price at which it is sold. In other words, the behavior of people as they interact with one another in competitive markets.

Answer 1

Supply @ Demand

Question 2

A group of buyers and sellers of a particular good or service. Buyers determine the demand, while sellers determine the supply of a product.

Answer 2

Market

Question 3

This group of people determine demand

Answer 3

Buyers

Question 4

This group of people determine the Supply.

Answer 4

Sellers

Question 5

So many buyers and sellers that each has no effect on the market price.

Answer 5

Competitive Market

Question 6

To reach this form of competition, a market must have 2 characteristics: 1) The goods are exactly the same; 2) There is an infinitely large amount of sellers and consumers, so no one has influence over the market price.

Answer 6

“Perfectly Competitive” Market

Question 7

The price of a commodity when sold in a given market.

Answer 7

Market price

Question 8

One seller and they set the price

Answer 8

Monopoly

Question 9

Amount of a good or service buyers are willing and able to purchase

Answer 9

Quantity demanded

Question 10

Other things considered equal, as price rises, demand falters, vice Versa…

Answer 10

Law of Demand

Question 11

A table that shows the relationship between demand and price (all other things held equal)

Answer 11

Demand schedule

Question 12

The line relating price and quantity demanded on a “Demand schedule”

Answer 12

Demand Curve

Question 13

Demand for this type of good falls when income falls

Answer 13

“Normal good”

Question 14

A type of good that increases in demand as income decreases. (E.G. Bus rides instead of cab or car)

Answer 14

Inferior good

Question 15

Similar enough products, when prices rise for one, demand skyrockets for the other. (e.g. “Ice-Cream and Yogurt”)

Answer 15

Substitutes

Question 16

When a fall in price for one good increases the demand for another good. (e.g. Fudge & Ice Cream, Peanut butter and Jelly)

Answer 16

Compliments

Question 17

Amount of any good or service that sellers are willing and able to sell.

Answer 17

Quantity Supplied

Question 18

Other things equal, when the price of a good rises, the quantity supplied rises; on the other hand, when the price drops, so does the quantity supplied.

Answer 18

Law of Supply

Question 19

A table that shows quantity of good and amount supplied

Answer 19

Supply Schedule

Question 20

The curve relating price and quantity supplied. Generally a higher price means a higher quantity supplied. (All else equal)

Answer 20

Supply Curve

Question 21

Sum of individual firm supplied across the market

Answer 21

Market Supply

Question 22

All determinants in shifting the supply curve

Answer 22

Input Prices, tech, Expectations, Number of Sellers, Summary

Question 23

Where the supply and demand curves of markets intersect.

Answer 23

Market’s “Equilibrium”

Question 24

Price at supply and demand intersectional

Answer 24

Equilibrium price

Question 25

Quantity of product at the equilibrium point

Answer 25

Equilibrium quantity

Question 26

A situation of excess supply. Prices may also often fall. Movements along supply and demand curves not shifts.

Answer 26

Surplus

Question 27

A quantity of good demanded exceeds that of good supplied.

Answer 27

Shortage

Question 28

The price of and good adjusts to bring the quantity demanded and supplied into balance

Answer 28

Law of Supply and Demand