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50 True/False questions

  1. supply curve determinantsbehavior of people as they interact with one another in competitive markets

          

  2. marketin market economy, signals that guide economic decisions and allocate scare resources

          

  3. monopolymarkets that have only one seller that sets the price
    EX: cable TV company

          

  4. market equilibiruma situation in which the market price has reached the level at which quantity supplied equals quantity demanded

          

  5. market demand curvesum of all individual demands for a particular good or service

          

  6. market demandsum of all individual demands for a particular good or service

          

  7. law of demandsum of all individual demands for a particular good or service

          

  8. market supplysum of the supplies of all sellers
    shows how the total quantity supplied varies as the price of the good varies

          

  9. supply curvetable that shows the relationship between the price of a good and the quanitity supplied, holding constant everything else that influences how much producers of the good want to sell

          

  10. theory of supply and demandshows how buyers and seller behave and how they interact with one another
    shows how supply and demand determine prices in market economy and how prices allocate economy's scare resources

          

  11. equilibiruma situation in which the market price has reached the level at which quantity supplied equals quantity demanded

          

  12. surplusin market economy, signals that guide economic decisions and allocate scare resources

          

  13. determinants of demandincome
    price of substitutes and complements
    tastes
    expectations
    number of buyers

          

  14. surplusin market economy, signals that guide economic decisions and allocate scare resources

          

  15. pricesmarket price above equilibirum price
    causes market price to fall

          

  16. law of demandsum of all individual demands for a particular good or service

          

  17. equilibrium pricedetermines how much of the good buyers choose to consume and how much sellers choose to produce

          

  18. expectations shift in demand curveexpectations about future affect demand for a good or service toay

          

  19. supply curvethe curve relating price and quantity supplied
    slopes upward because, other things being equal, a higher price means a greater quantity supplied

          

  20. ......

          

  21. any change that raises quantity supplied at every price shifts curve to right
    EX: fall in price of sugar
    subsitituion = when fall in price of one good reduces demand for another good (sweaters and sweatshirts)
    complement = wen fall in price of one good raises demand for another good, pairs of good used together (peanut butter and jelly)

          

  22. perfectly competitivethe curve relating price and quantity supplied
    slopes upward because, other things being equal, a higher price means a greater quantity supplied

          

  23. complementswhen fall in price of one good raises demand for another good, pairs of good used together (peanut butter and jelly)

          

  24. at the equilibrium price, the quantity of the good that buyers are willing and able to buy ________ the quantity that sellers are willing and able to sellexactly equals

          

  25. income shift in demand curve...

          

  26. number of buyers shift in demand curvelower income means you have less to spend
    if demand for good falls when income falls = normal good
    if demand for good rises when income falls (bus rides) = inferior good

          

  27. equilibirum pricedetermines how much of the good buyers choose to consume and how much sellers choose to produce

          

  28. quanitity demandedamount of good that sellers are willing and able to sell
    at low prices, produce less or shut down and quantity supplied falls to zero

          

  29. normal goodif demand for good falls when income falls

          

  30. tastes shift in demand curvelower income means you have less to spend
    if demand for good falls when income falls = normal good
    if demand for good rises when income falls (bus rides) = inferior good

          

  31. quantity suppliedthe amount of good that buyers are willing and able to purchase
    price of good determines quantity demanded

          

  32. demand curveshows how the quantity of good demanded depends on price
    slopes downward

          

  33. supply and demandbehavior of people as they interact with one another in competitive markets

          

  34. prices of related goods shift in demand curvesubsitituion = when fall in price of one good reduces demand for another good (sweaters and sweatshirts)
    complement = wen fall in price of one good raises demand for another good, pairs of good used together (peanut butter and jelly)

          

  35. law of supplythe claim that other things being equal the quantity supplied of a good rises when the price of the good rises

          

  36. supply curve shifts1. input prices
    2. technology
    3. expectations
    4. number of sellers

          

  37. shortagequantity supplied is greater than quantity demanded
    excess supply
    firms respond by cutting prices
    falling prices increase quantity demanded and decrease quantity supplied
    market price is above equilibrium price

          

  38. demand curveline relating price and quantity demanded

          

  39. by reducing firms costs, the advance in technology _______ supplyraises

          

  40. shortagemarket price below equilibirum price
    causes market price to rise

          

  41. substitueswhen fall in price of one good reduces demand for another good (sweaters and sweatshirts)

          

  42. shifts in demand curve1. income
    2. prices of related goods
    3. tastes
    4. expectations
    5. number of buyers
    6. prices of related goods

          

  43. demand scheduleline relating price and quantity demanded

          

  44. law of supplysum of the supplies of all sellers
    shows how the total quantity supplied varies as the price of the good varies

          

  45. competitive marketdescribes market in which there are so many buyers and sellers that each has negligible impact on market price
    EX: each seller of ice cream has limited control over the price because other sellers are offering similar products, a seller has little reason to change less than going price and if he charges more buyers will make their purchases elsewhere, no single buyer of ice cream can inflence the price of ice cream because each buyer purchases only small amount

          

  46. law of supply and demandshows how buyers and seller behave and how they interact with one another
    shows how supply and demand determine prices in market economy and how prices allocate economy's scare resources

          

  47. competitive marketmany buyers and sellers whom have little or no influence on market price

          

  48. inferior goodif demand for good rises when income falls (bus rides)

          

  49. supply schedulea table that shows the relationship between price of good and quantity demanded

          

  50. if input prices rise substantially a firm might shut down
    supply of a good is __________ related to price of the inputs used to make the good
    raises