question
normal goods
answer
Demand for them increases as income increases.
question
inferior goods
answer
Demand for them decreases as income increases.
question
substitutes
answer
As price of a good X increases, demand for product Y increases.
question
complements
answer
As price of good X increases, demand for good Y decreases.
question
change in demand/supply
answer
Shift of curve
question
change in quantity demanded/supplied
answer
Movement along curve
question
law of demand
answer
as price increases, quantity demanded decreases
question
law of supply
answer
as price increases, quantity supplied increases
question
equilibrium
answer
When quantity supplied = quantity demanded.
question
shortage
answer
Quantity demanded is greater than quantity supplied.
question
surplus
answer
Quantity supplied is greater than quantity demanded
question
price ceilings
answer
A maximum price that sellers are allowed to charge. Only efficient if it's below equilibrium.
question
price floors
answer
A minimum price buyers are allowed to pay for a good or service. Only efficient if it's above equilibrium.
question
deadweight loss
answer
The lost producer and consumer surplus
question
consumer surplus
answer
the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it
question
producer surplus
answer
the amount a seller is paid for a good minus the seller's cost of providing it
question
supply
answer
the amount of goods producers are willing and able and sell
question
demand
answer
the amount of goods consumers are willing and able to buy
question
elasticity of demand
answer
a measure of how consumers react to a change in price
question
income elasticity of demand
answer
a measure of how much the quantity demanded of a good responds to a change in consumers' income
question
cross-price elasticity of demand
answer
a measure of how much the quantity demanded of one good responds to a change in the price of another good
question
inelastic demand
answer
An increase or a decrease in price will not significantly affect the amount purchased
question
elastic demand
answer
Consumers are sensitive to a change in price
question
income elasticity (positive coefficient)
answer
normal good
question
income elasticity (negative coefficient)
answer
inferior good
question
Cross-price elasticity (positive coefficient)
answer
Substitute goods
question
Cross-price elasticity (negative coefficient)
answer
complementary goods
question
Increase in supply
answer
The equilibrium price decreases and the equilibrium quantity increases
question
decrease in demand
answer
The equilibrium price decreases and equilibrium quantity decreases.
question
Increase in Demand and Decrease in Supply
answer
price increases; quantity is indeterminate
question
Increase in Demand and Increase in Supply
answer
price is indeterminate; quantity increases
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
