price mechanism

Question 1

demand

Answer 1

refers to the quantity of a good or service that consumers are willing and able to buy at various prices, in a given time period

Question 2

quantity demanded

Answer 2

refers to the amount a consumer is willing and able to buy at a given price

Question 3

the law of demand

Answer 3

there is an inverse (or negative) relationship between price and quantity demand, ceteris paribus

Question 4

price mechanism

Answer 4

refers to the coordination mechanism by which the independent decisions of consumers and producers result in the allocation of scarce resources in a free market economy

Question 5

total utility

Answer 5

the total satisfaction a person derives from consuming a given amount of a good per period of time.

Question 6

marginal utility

Answer 6

defined as the additional satisfaction derived from consuming the additional unit of good per period of time

Question 7

supply

Answer 7

the willingness and ability of a firm to offer a good for sale at various prices in a given time period

Question 8

law of supply

Answer 8

states that there is a direct relationship between price and quantity supplied, ceteris paribus