econ unit 2

Question 1

what does micro focus on

Answer 1

decisions made by individuals and firms

Question 1

what influences price that consumer pay and producers charge us

Answer 1

quantity demanded

Question 2

law of demand

Answer 2

when consumers are willing to buy more of a product at lower prices and less of a product at higher prices

Question 3

law of supply

Answer 3

as price inc, businesses with increase production. as price dec, businesses will decrease production

Question 4

demand curves

Answer 4

shows the quantity demanded at all possible prices

Question 5

demand schedule

Answer 5

a table that lists how much of a product consumers will buy at all possible prices

Question 6

marginal utility

Answer 6

additional usefulness a consumer gets from having 1+ unit of same product

Question 7

diminishing marginal utility

Answer 7

Dec in usefulness from having 1+ unit of same product

Question 8

substitutes

Answer 8

buying a Meijer brand of food instead of name brande

Question 8

how does change in price impact the qd by consumers

Answer 8

inc in price causes a dec in quantity demanded by consumers and a decrease in price will cause an inc in qd

Question 9

complements

Answer 9

dec in cereal price causes inc in qd for cereal and milk

Question 10

elastic demand

Answer 10

change in price causes a ig change in qd
-food, many substitutes

Question 11

inelastic demand

Answer 11

change in price causes relatively smaller change in qd
-gas, not many substitutes

Question 12

factors causing change in demand

Answer 12

income effect, substitution, complements, expectations, consumer tastes

Question 13

elastic supply

Answer 13

supply changes more than price. businesses can respond quickly to change in demand
-turkey around holidays

Question 14

inelastic supply

Answer 14

supply changes less than price. businesses can’t respond quickly to change in demand
-oil

Question 15

factors causing change in supply

Answer 15

tech, productivity, number of sellers, cost of resources, government regulation, expectations, taxes

Question 16

messages prices send to buyers and producers

Answer 16

high prices: buyers buy less, producers produce more
low prices: buyers buy more, producers produce less

Question 17

equilibrium price

Answer 17

price where quantity supplied by producers equals quantity demanded by consumers`

Question 18

shortages

Answer 18

quantity supplied is less than quantity demanded at given price

Question 19

surplus

Answer 19

quantity supplied is greater than quantity demanded at given price

Question 20

price ceiling

Answer 20

highest legal price that can be charged for a product

Question 21

price floor

Answer 21

lowest legal price that can be charged for a product

Question 22

externalities and why difficult for society to handle

Answer 22

costs or benefits felt by 3rd party due to economic activities. can be good or bad effects people either way

Question 23

pos externalities

Answer 23

situation where a pos impact on 3rd party due to econ activity

Question 24

negative externalities

Answer 24

situation where a negative impact on 3rd party due to econ activity

Question 25

fixed cost example

Answer 25

rent and salaries

Question 26

variable cost example

Answer 26

raw materials and production supplies