Macro Chapter 3

A change in the quantity supplied is represented by

a movement along the supply curve

Economic efficiency occurs when

all goods and services are produced and consumed at their socially optimal

seller's reservation price

lowest price seller would be willing to sell for. equal to marginal cost

A change in quantity demanded is represented by

movement along the demand curve

A change in demand is represented by a

shift in the entire demand curve

If the demand for apartments decreases when house prices falls, then this suggests that apartments and houses are

substitutes

buyer's reservation price

the largest dollar amount the buyer would be willing to pay for a good

A schedule or graph showing the quantity of a good that buyers wish to buy at each price known as a

Demand Curve

The introduction of rent controls could lead to the following

Discrimination against tenants on the basis of race, religion, or other factors Poorer maintenance of rent-controlled apartments

A schedule or graph showing the quantity of a good that sellers wish to sell at each price is known as a

Supply Curve

low hanging fruit principle

Upward sloping curve

supply curve

Upward sloping with respect to price

If butter an popcorn are complements, then an increase in the price of butter will lead to

a decrease in the demand for popcorn

A maximum allowable price specified by law is a

price ceiling