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19 Cards in this Set
- Front
- Back
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A market is the institution of mechanism that brings together buys or __________ and sellers or _________ of a particular good or service.
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Demanders, Suppliers
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The relationship between price and quantity in the demand schedule is _________ relationship; in the supply schedule the relationship is ______ one |
an inverse, A direct
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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
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A consumer tends to buy more of a product as its price falls because a. The purchasing power of the consumer is increased and the consumer tends to buy more of this product (and of other products); this is called the _______ effect. b. The product becomes less expensive related to similar products and the consumer tends to buy more of the original product and less of the similar products, which is called the ________ effect |
Income, substitution
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When demand or supply is graphed, price is on the ______ axis and quantity on the _____ axis |
Vertical, Horizontal
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The change from an individual to a market demand schedule involves ________ the quantities demanded by each consumer at the various possible ________ |
Adding, Prices
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When the price of one product and the demand for another product are directly related, the two products are called _____; however, when the price of one product and the demand for another product are inversely related, the two products are called _______ |
Substitutes, complements
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When a consumer demand schedule or curve is drawn up, it is assumed that live factors that determine demand are fixed and constant. These five determinants of consumer demands are |
a. Tastes of consumers b. Number of consumers c. Income of Consumers d. Price of related goods e. Consumer expectations |
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A decrease in demand means that consumers will buy _____ quantities at every price, or will pay __________ for the same quantities |
Smaller, Less
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A change in income or in the price of another product will result in a change in the _______ the given product, while a change in the price of the given product will result in a change in the _______ the given product. |
Demand for, quantity demanded
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An increase in supply means that producers will make and be will to sell _______ quantities at every price, or will accept ______ for the same quantities |
Larger, Less
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A change in the resource prices or the prices of other goods that could be produced will result in a change in the _______ of the given product, but a change in the price of the given product will result in a change in the________ |
Supply, Quantity Supplied
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The fundamental factors that determine the supply of any commodity in the product market are |
a. The Technology of production b. Resource Prices c. Taxes and subsidies d. Prices of other goods e. Producer expectations f. Number of sellers in the market. |
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The equalibirum price of a product is the price at which quantity demanded is _________ quantity supplied, and there ______ a surplus or a shortage at that price. |
Equal to, Is not
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If Quantity demanded is greater than quantity supplied, price is ________ the equilibrium price; and the _____ will call the price to _____. If quantity demanded is less than the quantity supplied, price is ______ the equilibrium price, and the _____ will cause the price to _________ |
Below, Shortage, Rise, Above, Surplus, Fall
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If supply and demand establish a price of a good so that there is no shortage or surplus of the product, then price is successfully performing its ________. The price that is set is a market _______ price. |
Rationing, Clearing.
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A competitive market produces two types of efficiency: Goods and services will be produced in the least costly way, so there will be ______ efficiency; and resources are devoted to the production of the mix of goods and services society most wants, or there is ________ efficiency |
Productive, Allocative
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A price ceiling is the ___________ legal price a seller may charge for a product or service, whereas a price floor is the _____ legal price set by government |
Highest, lowest
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If a price ceiling is below the market equilibrium price, a _________ will arise in a competitive market, and if a price floor is above the market equilibrium price, a ________ will arise in a competitive market. |
Shortage, Surplus
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