unit 2: chp 4-6

Question 1

what is a market

Answer 1

a group of buyers and sellers of a certain good or service

Question 2

Competitive market

Answer 2

there are so many buyers and sellers where each doesn’t have much of an impact on the market price

Question 3

monopoly

Answer 3

a market with only one seller (also a non competitive market

Question 4

quantity demanded

Answer 4

the amount of a good that buyers are willing to purchase

Question 5

law of demand

Answer 5

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

Question 6

demand schedule

Answer 6

a table that shows the relationship between price of good and quantity demanded

Question 7

demand curve

Answer 7

a graph of the relationship between price & quantity demanded

Question 8

normal good

Answer 8

income falls = demand falls the good is a normal good

Question 9

inferior good

Answer 9

something that is bought due to less income - income falls = demand rises

Question 10

substitutes

Answer 10

two goods where an increase in price leads to increase in demand for another

Question 11

complements

Answer 11

two goods where an increase in price leads to a decrease in demand for another

Question 12

list an example of a substitute and complement

Answer 12

sub:
complement:

Question 13

quantity supplied

Answer 13

the amount of goods that sellers are willing and able to sell

Question 14

law of supply

Answer 14

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

Question 15

equilibrium

Answer 15

the quantity supplied and the quantity demanded at the equilibrium price

Question 16

equilibrium price

Answer 16

the price that balances the quantity supplied and quantity demanded

Question 17

equilibrium quantity

Answer 17

a sitution where the price has reached the level where quantity supplied = quantity demanded

Question 18

surplus

Answer 18

quantity supplied is greater then the quantity demanded

Question 19

shortage

Answer 19

a situation where the quantity demanded is greater then the quantity supplied

Question 20

law of supply and demand

Answer 20

the claim that the price of any good adjusts to bring the quantity supplied and the quantity demanded for that good into balance

Question 21

elasticity

Answer 21

a measure of the responsiveness for quantity demanded or supplied

Question 22

price elasticity of demand

Answer 22

Demand is just how many of an item a consumer is willing to buy—the sheer quantity. Quantity demanded is how many things a consumer will purchase at a specific price. Quantity demanded is a more detailed metric. 1 Graphed out, demand is the entirety of the demand curve, whereas quantity demanded is a single point.

Question 23

what is the difference between quantity demanded and demand?