Economics 1140 Self Test
is the set lower limit for price or wage
floor
A free-market economy maximizes individual ... and minimizes state ...
freedom, coercion
satisfaction derived from the consumption of one unit of a good or service
marginal utility
Surpluses and shortages are ... likely to occur when government price controls become a part of the market
more
represents the economic value of a good or service in terms of money
price
When supply and demand increase or decreases equally, ...; if demand increases more than supply, ...; if supply increases more than demand, ...
price remains the same; both quantity and price increase; price decreases and quality increases
study of how the competitive market system operates
price theory
activities performed for others
services
A producer may eliminate a shortage by ...
decreasing demand, increasing supply by increasing production, improving technology, or cutting costs, increasing price and production
... is the desire for a good or service coupled with the ability and willingness to purchase it
demand
decrease in satisfaction provided by each additional unit of a good or service
diminishing marginal utility
The law of supply is, "Supply varied ... with price," or, "The higher the price, the ... the supply"
directly; greater
If a product has a ... demand, revenue increases when price decreases
elastic
The quantity of goods with an ... supply can be increases in a short period of time
elastic
diamonds
elastic
gold
elastic
luxuries
elastic
require a large portion of a consumer's budget
elastic
respond quickly to a change in price
elastic
What are the four limited factors of production in a free-market economy
capital; natural resources; management; labor
is the set upper limit for a price or wage
ceiling
ultimate arbiters of economic decisions
consumer preferences
A shift in demand may be caused by a change in ...
consumer tastes and preferences; consumer expectations; the price of the good or service; the price of the alternative choices; consumer income
... is the major factor in determining supply
cost
What are four factors that can influence supply?
cost of production, time, price, technology
A demand or supply ... is the same information shown on a graph
curve
Rising prices...
encourage production because of expectation of increased profits; notify financial institutions as to which businesses are good risks for capital loans; inform producers that they must increase profits
On supply and demand curves, the ... is the point at which the supply curve and demand curve cross
equilibrium price
The ... price is the price at which supply and demand are ... and all elements of the market are satisfied
equilibrium, equal
commodities that are grown, mined, or manufactured
goods
According to the law of supply and demand in equilibrium, when demand exceeds supply, price ...; and when supply exceeds demand, price ...
increase, decrease
A producer may eliminate a surplus by ...
increasing demand, decreasing supply, lowering price until the surplus is sold
Agricultural products have an ... supply
inelastic
If a product has a ... demand, revenue decreases when prices decreases
inelastic
bread
inelastic
necessities
inelastic
salt
inelastic
Short-run equilibrium represents an ... supply, and long-run equilibrium reflects a more ... supply
inelastic, elastic
occurs during a period of perfect inelasticity of supply
instantaneous equilibrium
value based on the value of the components, scarcity, and labor
intrinsic
The law of demand is, "demand varies ... with price," or, "The higher the price the ... the demand."
inversely; smaller
A demand or supply ... is a table listing amounts of a product consumers will purchase or that are available for sale at various prices, in a specific market, and at a given point in time
schedule
occurs when demand is greater than supply
shortage
value based on the consumer's idea of a commodity's usefulness
subjective
... is the quantity of a good or service that is available for sale
supply
The interaction of ... and ... determines prices in a free-market system
supply, demand
... is the producers' side of the market, and ... is the consumers' side
supply; demand
occurs when supply is greater than demand
surplus
Consumer evaluation of alternatives is the basis of ...
trade
If a product has a ... demand, revenue remains the same whether price increases or decreases
unitary
satisfaction a consumer receives from a good or service
utility