symmes economics Ch. 7
floor
A price _________ is sometimes called a price support.
equilibrium price
Price at which the amount producers are willing to supply is equal to the amount consumers are willing to buy
elastic
When a change in price leads to a large change in quantity demanded, the demand is called __________.
shifts to the right
When a product becomes wildly popular (a new fad), the demand curve ____________.
substitutes
When the price of a good becomes too high, consumers look for __________.
substitutes
When the price of a good is too high for consumers, they look for ________.
Market
process of freely exchanging goods and services between buyers and sellers
surplus
Situation in which quantity supplied is greater than quantity demanded
shortage
Situation in which the quantity demanded is reater than the quantity supplied
fall
A decrease in income generally causes demand to fall, which in turn causes the quantity supplied and the equilibrium price to _______ (rise/fall).
left
A decrease in income, a decrease in population, a decrease in the price of a substitute, or an increase in the price of a complement causes the demand curve to shift to the ________ (right/left).
complement
A decrease in the price of a product (french fries) leads to an increase in the demand for its __________ good (ketchup).
falls
According to the law of demand, when the price of an item goes up, the quantity demanded ___________ (rises/falls).
more
According to the law of supply, higher prices prompt producers to produce __________ (more/less).
utility
Amount of satisfaction received from a purchae
marginal utility
An additional amount of satisfaction
right
An increase in income, an increase in population, an increase in the price of a substitute or a decrease in the price of a complement causes the demand curve to shift to the ______ (right/left).
elastic
Demand for one particular brand of coffee is probably __________(elastic/inelastic).
elasticity
Economic concept dealing with consumers' responsiveness to an incrase or decrease in price
law of diminishing returns
Economic rule stating that as more units of a factor of production are added, total output continues to incrase, but at a diminishing rate
substitution effect
Economic rule stating that if two items satisfy the same need and the price of one rises, people will buy the other
real income effect
Economic rule stating that individuals cannot keep buying the same quanitty of a product if its price rises while their incomes stay the same
law of demand
Economic rule stating that the quantity demanded and price move in opposite directions
more
Generally, the more substitutes there are for a good, the _______ (more/less) elastic the demand.
elastic
If a product has _______ (elastic/inelastic) demand, producers must be cautious about raising prices.
falls
If more suppliers enter the market, equilibrium price _______ (rises/falls).
falls
If price decreases, quantity supplied ______ (rises/falls).
rises
If price increases, quantity supplied _________ (rises/falls).
surplus
If the price of a product is above its equilibrium price, the result is a ________.
falls
If the price of an item rises, quantity demanded usually ___________ (rises/falls).
substitute
If the price of potatoes rises considerably, McDonald's may look for a _________ for french fries.
price ceiling
Legal maximum price that may be charged for a particular good or service
Demand
The amount of a good or service that consumers are able and willing to buy at various possible prices during a specific time period
supply
The amount of a good or service that producers are able and willing to sell at various prices during a specified time period is _________.
shifts to the right
The demand curve _________ in response to an increase in demand.
downward
The demand curve slopes ________ from left to right.
`rationing
The distribution of goods and services based on something other than price
equilibrium
The interaction of supply and demand determines the __________ price.
diminishing marginal utility
The principle that states that the more you have of something, the less satisfaction you will get from an additional unit is the law of ___________.
price
The quantity demanded of a product is affected by __________.
upward
The supply curve slopes _______ from left to right.
right
When the quantity demanded increases at all price points, the demand curve shifts to the _________ (right/left).