Econ Test 3

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Demand elasticity

Extent to which a change in price causes a change in quantity demanded

Demand elasticity

Extent to which a price change causes a change in the quantity demanded

What will it take to meet the future demand for fuel?

Funding and new technology

Subsidy

Government payment to an individual, business, or other group for certain actions

Price ceiling

Government set maximum price that can be charged for goods and services

Price floor

Governments minimum price that can be charged for goods and services

Demand curve

Graph that shows the amount of a product that would be bought at all possible prices

Supply curve

Graph that shows the amount of product that would be supplied all possible prices in the market

Demand is likely to be inelastic for goods that

Have very few or no substitutes

Utility

Pleasure, usefulness, or satisfaction that people get from using a product

Equilibrium price

Point at which supply and demand achieve balance

Inelastic demand

Price changes that do not affect quantity demanded

Which factor has the most significant influence on the quantity supplied of any product?

Price of the product

Why do demand curves usually slope downward?

Price ⬆️ demand ⬇️

The vertical axis of a demand curve for a product displays?

Prices

What does the phrase the market cleared mean?

Prices reached equilibrium

Diminishing marginal utility

Principal the additional satisfaction with a product tends to go down is more units are consumed

Law of demand

Principle that quantity demanded and price move in opposite directions

Law of supply

Principle that suppliers will normally offer more for sale at higher prices and less at lower prices

Cars

Product with demand elasticity

Complements

Products that are used together

The horizontal axis of a demand curve displays

Quantities

What does a demand schedule show?

Quantities and prices

Productivity

Rate at which a company produces goods or services in relation to the amount of materials and number of employees needed

Why do supply curves typically slope upward?

Same direction Supply ⬆️ Price ⬆️

Inelastic demand

Situation in which price changes have little effect on the quantity demanded

Inelastic supply

Situation in which price changes have little effect on the quantity supplied

Demand schedule

Table that lists the quantities of a product or service that someone is willing to buy over a range of possible prices

Why do consumers in command economics face limited choices?

The Government

Shortage

Amount by which the quantity demanded is higher than the quantity supplied

Surplus

Amount by which the quantity supplied is higher than the quantity demanded

Factor affecting supply

Cost of resources

Which of the following is a characteristic of a market economy?

People have the freedom to choose from a variety of products

How do businesses react to a surplus?

Drop prices

Supply elasticity

Measure of how the quantity supplied of a good or service changes in response to changes in price

Technology

Methods or processes used to make goods and services

Profit

Money a business receives for its products or services over and above its costs

Factor affecting market demand

Number of consumers

Which of the following causes a change in demand

Number of consumers

Supply schedule

Numerical chart that illustrates the law of supply

Freedom of choice

One advantage of the price system

Which statement correctly summarizes the passage?

People are using oil faster than they are finding new sources

You demand curve shifts to the left when

People are willing to buy fewer items at all possible prices

A demand curve shifts to the right when

People are willing to buy more of the same item at any given price

The demand for goods and services in a particular area would probably increase if

A new apartment building in the area filled with families

Which factor is most likely to cause a supply of a product to decrease?

A repeal of subsidies for producers

Factors affecting demand

Changes in consumers' income, tastes, or expectations

Examples of substitutes

Coffee and tea demand

Market supply

Combined supply schedules of all businesses that provide the same good or service

Substitutes

Competing products that can be used for the same purpose

According to the information in the passage, supply of the product was influenced by

Consumer incomes

Demand for a product tends to increase when

Consumers expect a shortage

Why does the utility of a good or service often vary from one person to the next?

Consumers taste

Which sales strategy demonstrates an understanding of the principle of diminishing marginal utility?

Consumers who purchase an item at full price may purchase another item at half-price

Examples of complements

DVD players and DVDs

Individual demand

Desire, willingness, and ability of one person to buy a good or service

Demand

Desire, willingness, and ability to buy a good or service

The man's question demonstrates that he

Does not understand the relationship between supply and demand

The primary motive in business to

Increase profits

The situation described in the passage best illustrates which of the following economic principles?

Inelastic demand

Which of the following pairs of products are complements

Lightbulbs and lamps

Minimum wage

Lowest minimum amount that can be paid to most workers

Which example illustrates how changes in substitutes can influence demand?

The demand for ford cars increases when the demand of General Motors cars increases

What is the main idea of the cartoon?

The demand for gasoline is greater than the supply

Which example illustrates how changes in complements can influence demand?

The demand for light bulbs increases when the prices of lamps decrease

In the United States, prices are established primarily through

The forces of supply and demand

A surplus typically indicates that

The price is too high

What is the main purpose of government price controls

To correct unfairness in supply and demand

Market demand

Total demand of all consumers to buy a product or service

Which of the following will drive the projected increase demand for oil in the future?

Transportation needs

Government price controls

Used when the forces of supply and demand are unfair

Supply

Various quantities of a good or service that producers are willing to sell at all possible market prices

Polling consumers

Way to measure demand

Which of the following statements best answers the question posed by the man in the cartoon?

When demand increases, price increases


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