Econ Chapter 3
While a change in price of the the given product will result in a change in the what of a given product?
Quantity demanded of
If supply and demand establish a price for a good so that there is no shortage or surplus of the product then price is successfully performing its what function?
Rationing
Income Effect
a change in the quantity demanded of a product that results from the change in real income (purchasing power) caused by a change in the products price
Assume that the price of video game players falls. What will most likely happen to the equilibrium price and quantity of video games, assuming this market is competitive?
price will increase, quantity will increase
The law of supply states that other things being constant, as price increase?
quantity supplied increases
A market is the institution or mechanism that brings together sellers or?
Suppliers
A market is any arrangement that brings together the buyers and sellers of a particular good or service. True or False
T
The equilibrium price of a product is the price at which quantity demanded is greater than or equal to quality supplied?
Equal to
In the supply schedule the relationship is?
A direct one
Substitution Effect
(1) A change in the quantity demanded of a consumer good that results from a change in its relative expensiveness, caused by a change in the goods own price; (2) the reduction in the quantity demanded of the second pair of substitute resources that occurs when the price of the first resource falls and causes firms that employ both resources to switch to using more of the first resource (whose price has fallen) and less of the second resource (who's price has remained the same
The fundamental factors that determine the supply of any commodity in the product market are?
1. The technology of production 2. Resource Prices 3. Taxes and Subsidies 4. prices of other goods? 5. producer expectations of price. 6. The number of sellers in the market
When a consumer demand schedule or curve is drawn up, it is assumed that five factors that determine demand are fixed and constant? These five determinants of consumer demand are?
1. the taste or preference of consumers 2. the number of consumers in the market 3. the money income of consumers 4. the prices of related goods. 5. Consumer expectations with respect to future prices and income.
Which change will decrease the demand for a product?
A decrease in the number of buyers.
Demand
A schedule of prices and the quantities that buyers would purchase at each of these prices during a selected period of time.
If the price of a product is below the equilibrium price, the result will be?
A shortage of the good
The change from an individual to a market demand schedule involves doing what to the quantities?
Adding
The relationship between price and quantity in the demand schedule is what kind of relationship?
An Inverse
A decrease in the supply of a product would most likely be caused by?
An increase in business taxes.
A market is?
Any institution or mechanism that brings together buyers and sellers of a particular good or service.
When the price of one product and the demand for another product are inversely related, the two products are called?
Complements
A schedule that shows the various amounts of a product consumers are willing and able to purchase at each price in a series of possible prices during a specified period of time is called?
Demand
A change in income or in the price of another product will result in a change in the what of a given product?
Demand for.
A market is the institution or mechanism that brings together buyers or?
Demanders
When demand or supply is graphed, quantity os placed on what axis?
Horizontal
A consumer tends to buy more of a product as its price falls because the purchasing power of the consumer is increased and the consumer tends to buy more of this product, This is called the what effect?
Income
If two goods are substitutes for each other, an increase in the price of one will necessarily?
Increase the demand for the other.
An increase in supply means the producers will make and be willing to sell what quantities at every price?
Larger
A decrease in demand means consumers will buy larger or smaller quantities at every price?
Smaller
When the price of one product and the demand for another product are directly related, the two products are called?
Substitutes
The product becomes less expensive relative to similar products and the consumer tends to buy more of the original product and less of the similar products which is called what effect?
Substitution
Diminishing Marginal Utility
The principal that as a consumer increases the consumption of a good or service, the marginal utility obtained from each additional unit of the good or service decreases
Law of Demand
The principal that, other things equal, an increase in a products price will reduce the quantity of it demanded, and conversely for a decrease in price
The added satisfaction or pleasure a consumer obtains from additional units of a product decreases as the consumer's consumption of the product increases. This phenomenon is called diminishing marginal?
Utility
When demand or supply is graphed, price is placed on what axis?
Vertical
supply curve
a graphic representation of supply and the law of supply; it has an upward slope, indicating the positive relationship between price and quantity supplied
Th reason for the law of demand can best be explained in terms of ?
diminishing marginal utility