Supply and Demand

Question 1

the quantity supplied at certain prices; different than quantity

Answer 1

Supply

Question 2

attitude of those in the market buying

Answer 2

Demand

Question 3

business or organization (owned by an individual)

Answer 3

Firm

Question 4

the exchange of inputs we produce

Answer 4

Factor markets

Question 5

the exchange of goods and services

Answer 5

Product markets

Question 6

a condition in which an individual or firm has an unfair advantage (decreases efficiency)

Answer 6

Market power

Question 7

limits market power

Answer 7

Equal access to information

Question 8

a situation where there is no way to make someone better off without making someone worse off (highest efficiency)

Answer 8

Pareto Optimality

Question 9

amount that demand responds to market conditions

Answer 9

Elasticity

Question 10

insignificant change in demand regardless of market conditions

Answer 10

Inelastic

Question 11

a good for which there are no substitutes; more inelastic; e.g healthcare, gasoline

Answer 11

Necessity

Question 12

more elastic

Answer 12

Luxury

Question 13

Factors that determine inelasticity

Answer 13

Necessity vs. luxury
Price and quantity of available substitutes
Time frame
Price relative to wealth and income

Question 14

percentage change in quantity and price are equal

Answer 14

Unitary elasticity

Question 15

price X quantity

Answer 15

Total revenue

Question 16

significantly elastic demand in which demand is more dependent on price

Answer 16

Price sensitive

Question 17

factors that alter changes in demand

Answer 17

Shift variables

Question 18

a variable that is impacted by complements and substitutes (related goods)

Answer 18

Price of related goods

Question 19

items that are often consumed together (e.g. french fries & ketchup)

Answer 19

Complements

Question 20

goods that can replace the utility of another good (e.g. Pepsi & Coke)

Answer 20

Substitutes

Question 21

how much a quantity demand change in one good impacts the price of another good

Answer 21

Cross price elasticity

Question 22

how much the quantity demanded of a good of services changes as a result of income

Answer 22

income elasticity (of demand)

Question 23

any good in which demand increases as income increases

Answer 23

Normal goods

Question 24

any good in which demand decreases as income increases

Answer 24

Inferior goods

Question 25

sum of the individual demands for a product from buyers in the market

Answer 25

market demand

Question 26

changes in demand as people enter or exit a market; demographics of a market are important; these are often age-specific factors of a good or service

Answer 26

Entry & exit shifts in demand

Question 27

Measuring elasticity ϵ =

Answer 27

% of quantity change

Question 28

ϵ<1

Answer 28

inelastic

Question 29

ϵ>1

Answer 29

elastic

Question 30

ϵ=0

Answer 30

perfectly inelastic

Question 31

ϵ= 1

Answer 31

unitary elasticity