demand/supply

Question 1

demand definition

Answer 1

desire to own something and the ability to pay for it

Question 2

law of demand

Answer 2

as price of goods or services fall, more will be purchases and vice versa

Question 3

law of demand relationship

Answer 3

inverse

Question 4

income effect definition and relationship

Answer 4

as the income changes, the demand also changes, direct

Question 5

as income increases, what happens to the demand of the goods/services

Answer 5

demand increases

Question 6

substitution effect

Answer 6

as price rises or incomes decrease, consumers will replace more expensive goods with less costly alternatives

Question 7

demand schedule

Answer 7

table that lists the quantities of a good a person will buy at each price

Question 8

demand curve and slope of it

Answer 8

graphic representation of a demand schedule- slopes down and to the right

Question 9

ceteris paribus

Answer 9

the effect of one economic variable on another, while holding all other things constant

Question 10

normal good and example

Answer 10

experiences an increase in demand when income of buyer increases (car)

Question 11

inferior good and example

Answer 11

experiences a decrease in demand when the income of the buyer increases

Question 12

complement

Answer 12

good or service used/bought with another service… usually little value until put with other good/service

Question 13

substitute

Answer 13

another purchase option instead of the desired product

Question 14

elasticity of demand

Answer 14

change in quantity demanded directed by the percentage change

Question 15

elasticity of demand formula

Answer 15

E= (Q1-Q2)/Q1 divided by (P1-P2)/P1

Question 16

inelastic

Answer 16

unaffected by price change E

Question 17

elastic

Answer 17

affected by price change E > 1

Question 18

unitary elastic

Answer 18

E = 1

Question 19

total revenue and formula

Answer 19

total amount of money brought in from selling a good or service (price x quantity)

Question 20

supply

Answer 20

willingness and ability of producers to provide goods and services at different prices in a market place

Question 21

law of supply and relationship

Answer 21

higher prices= larger quantity available
lower prices= smaller quantity available
direct relationship

Question 22

quantity of supply

Answer 22

quantity of a good/service that a producer is willing to sell at a specific price

Question 23

supply schedule

Answer 23

method used to show the different amounts of a certain product that a company would need to supply based on difference price points

Question 24

supply curve

Answer 24

graphic representation between product price and quantity of product that a seller is willing and able to sell

Question 25

elasticity of supply definition

Answer 25

measure of how quantity supplied affects change in price

Question 26

elasticity of supply scale

Answer 26

E>1 elastic- rise and fall of price greatly affects quantity supplied
E

Question 27

marginal production of labor

Answer 27

change in production from hiring one additional worker

Question 28

marginal returns

Answer 28

as the number of products added to a market place increases, eventually the demand for them will go down

Question 29

total cost formula

Answer 29

TC = fixed costs + variable costs

Question 30

marginal cost

Answer 30

cost of producing one more unit

Question 31

marginal revenue

Answer 31

money brought in from producing one more unit (price)

Question 32

subsidy

Answer 32

sum of money granted by government

Question 33

excise tax

Answer 33

tax put on the production of a good or service

Question 34

equilibrium

Answer 34

price at which the quantity demanded equals exactly the quantity supplied (where supply curve and demand curve intersect)

Question 35

disequiibrium

Answer 35

where an internal/external force prevents market equilibrium causing the market to fall out of balance

Question 36

price ceiling

Answer 36

minimum price set below equilibrium

Question 37

price floor

Answer 37

minimum price set above equilibrium

Question 38

what does a price ceiling cause

Answer 38

shortage

Question 39

what does a price floor cause

Answer 39

surplus

Question 40

surplus

Answer 40

when there is a lot of product left over

Question 41

shortage

Answer 41

when there is a limited amount of product

Question 42

minimum wage

Answer 42

minimum amount an employer must pay someone (Ohio- $8.10)

Question 43

rationing

Answer 43

using existing supplies left over to reduce cost of production