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Throck Eco Ch 7
Throck Eco ch 7
| Question | Answer |
|---|---|
| What is demand? | the amount of a good or service that consumers are able and willing to buy at various prices during a specified time |
| What is supply? | the amount of goods or services that producers are able and willing to sell at various prices during a specified time |
| What is a market? | the process of freely exchanging goods and services between buyers and sellers. |
| What is voluntary exchange? | basis of a market eco: a transaction in which a buyer and a seller exercise thier economic freedom by workoung out thier own terms of exchange |
| What is the law of demand? | economic rule stating that the quanity demanded andprice move in opposite directions |
| What is quantity demanded? | the amount of a good that a consumer is willing and able to purchase at a specific price |
| What is the real income effect? | economic rule stating that individuals cannot keep buying the same quanity of a product if its price rises while thier income stays the same |
| What is the substitution effect? | economic rule stating that if two items satisfy the same need and the price of one rises, people will buy the other |
| What is utility? | the ability of any good or service to satisfy comsumer wants |
| What is marginal utility? | an additional amount of satisfaction you get from buying more of a product |
| What is the law of diminishing utility? | rule stating that the additional satisfaction a consumer gets from purchasing one more unit of a product will lessen with each additional unit purchased |
| What is the demand schedule? | table showing quantities demanded at different possible prices |
| What is the demand curve? | downward sloping line that shows in graph form the quantities demanded at each possible price |
| What is a complementary good? | A product that relates well with another product; products that go together |
| What is elasticity? | An idea dealing with a person's response to the increase or decrease in the price of a product |
| What is price elasticity of demand? | Deals with how much demand for products varies according to the change in prices |
| What is elastic demand? | the situation in which the rise or fall in prices greatly affects the amount that people are willing to buy |
| What is inelastic demand? | situation in which a product's price change has little impact on the quantity demanded. |
| If your income increases, what will happen to the quantity demanded of normal goods? | quantity demanded will increase |
| If your income decreases, what will happen to the quantity demanded for inferior goods? | quantity demandedwill increase |
| If the price of DVDs increase, what will happen to the quantity demanded for blue ray discs? | the quantity demanded will increase |
| If the price of blue ray discs decrease, what will happen to the quantity demanded for dvds? | quantity demanded will decrease |
| If the cost of ipods increase, what will happen to the quantity demanded for headphones? | quantity demanded will decrease |
| If the cost of mechanical pencils decrease, what will happen to the quantity demanded for lead refills? | quantity demanded will increase |
| Brittany, a popular girl at school, starts to wear leg warmers on her arms. What will happen to the quantity demanded for leg warmers? | quantity demanded will increase |
| If the price of stock in Wal Mart is expected to increase, what will happend to the current demand for the stock? | it will increase |
| If gas prices are expected to fall tomorrow, what will happen to current demand? | it will decrease |
| is the demand for brands of cheese elastic or inelastic? | elastic- demand will change with price |
| True or false: if salt goes on sale, demand will increase. | False- this is an inelastic item because the price really doesn't affect demand |
| Name the law: The price of Dr. Peppers continue to rise and Connor can no longer afford to buy 3 a day. She now can only buy 1. | real income effect |
| Name the law: Valerie bought red flip flops at Old Navy for $7. Then she buys a pair in green. She then decides that she will not buy any more flips flops for $7 because she would rather buy a shirt. She will however buy more when the shoes go on sale. | law of diminishing marginal utility |
Created by:
davislauren
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