Econ Chap 4

Question 1

a combination of quantities that someone would be willing and able to buy over a range of possible prices at a given moment.

Answer 1

Demand

Question 2

branch of economic theory that deals with behavior and decision making by small units such as individuals and firms.

Answer 2

Microeconomics

Question 3

listing showing the quantity demanded at all possible prices that might prevail in the market at a given time.

Answer 3

Demand Schedule

Question 4

something that motivates.

Answer 4

Incentive

Question 5

graph showing the quantity demanded at each and every possible price that might prevail in the market at a given time.

Answer 5

Demand Curve

Question 6

rule stating that more will be demanded at lower prices and less at higher prices; an inverse relationship between price and quantity demanded.

Answer 6

Law of Demand

Question 7

demand curve that shows the quantities demanded by everyone who is willing and able to purchase a product at all possible prices at one moment in time.

Answer 7

Market Demand Curve

Question 8

additional satisfaction or usefulness obtained from acquiring or consuming one more unit of a product.

Answer 8

Marginal Utility

Question 9

decrease in additional satisfaction or usefulness as additional units of a product are acquired.

Answer 9

Diminishing Marginal Utility

Question 10

movement along the demand curve showing that a different quantity is purchased in response to a change in price.

Answer 10

Change in Quantity Demanded

Question 11

that portion of a change in quantity demanded caused by a change in a consumer’s income when the price of a product changes.

Answer 11

Income Effect

Question 12

the portion of a change in quantity demanded that is due to a change in the relative price of the good.

Answer 12

Substitution Effect

Question 13

different amounts of a product are demanded at every price, causing the demand curve to shift to the left or to the right.

Answer 13

Change in Demand

Question 14

competing products that can be used in place of one another; products related in such a way that an increase in the price of one increases the demand for the other.

Answer 14

Substitutes

Question 15

products that increase the use of other products; products related in such a way that an increase in the price of one reduces the demand for both.

Answer 15

Complements

Question 16

a measure of responsiveness that tells us how a dependent variable, such as quantity demanded or quantity supplied, responds to a change in an independent variable such as price.

Answer 16

Elasticity

Question 17

the extent to which a change in price causes a change in the quantity demanded; demand elasticity has three cases: elastic, inelastic, and unit elastic.

Answer 17

Demand Elasticity

Question 18

type of elasticity in which a change in the independent variable (usually price) results in a larger change in the dependent variable (usually quantity demanded or supplied).

Answer 18

Elastic

Question 19

the case of demand elasticity where the percentage change in the independent variable (usually price) causes a less than proportionate change in the dependent variable (usually quantity demanded or supplied).

Answer 19

Inelastic

Question 20

elasticity where a change in the independent variable (usually price) generates a proportional change of the dependent variable (quantity demanded or supplied).

Answer 20

Unit Elastic