Economics Final

Question 0

The quantity demanded of a good falls when the price of the good rises.

Answer 0

Law of demand

Question 1

The amount of a good that buyers willing and able to purchase

Answer 1

Quantaty demanded

Question 2

Movement along the demand curve. Caused by a change in the price of the product.

Answer 2

Change in quantity demanded

Question 3

The amount of a good that sellers are willing and able to sell.

Answer 3

Quantity supplied

Question 4

The quantity supplied of a good rises when the price of the good rises

Answer 4

Law of supply

Question 5

Movement along the supply curve. Caused by a change in the price of the product.

Answer 5

Change in quantity supply

Question 6

The price of any good adjusts to bring the quantity supplied and quantity demanded for that good.

Answer 6

Law of supply and demand

Question 7

Qs=Qd

Answer 7

Equilibrium

Question 8

Demand shifters:

Answer 8

Tastes and preferences
Income of consumers
Related goods: substitutes + compliments
Expectations of future price changes
Size of population/market

Question 9

Measurement of consumers’ sensitivity to price

Answer 9

Elasticity of demand

Question 10

Buyers are responsive to price changes

Answer 10

Elastic

Question 11

Buyers are not responsive to price changes( these goods are needed for survival)

Answer 11

Inelastic

Question 12

Determinants of demand elasticity:

Answer 12

1. availability of substitutes
2. price is relative to income
3. neccesities vs. luxuries
4. time needed to adjust to price changes