| A | B |
|---|
| What do buyers seek in a market economy? | 1) lowest price 2) best quality 3) immediate availability |
| What do sellers seek in a market economy? | 1) high price for profit 2) the least expense to produce or acquire 3) greatest volume |
| If the price for gasoline increases, what effect would this have on "high mileage cars"? | It would increase the demand for "high mileage cars". |
| When the price of a good goes up what happens to the demand? | The demand goes down (too expensive for some buyers then). |
| When a product or service is needed no matter what, what type of demand curve does it have, even when the price for it increases? | The demand will not change and it will be inelastic. |
| What direction does the supply curve slope? | Its slope goes up to the right. |
| In the Law of Supply, business people must be willing to produce - true or false? | True |
| In the Law of Supply, business people must be willing to produce? | True |
| Suppliers want to sell more of a good if the price for it increases or decreases? | Increases |
| At market equilibrium what price change will occur? | The would be none to little price change because the supply and demand are in perfect order. |
| When suppliers have a surplus, what does this do to the price of goods? | It will cause the price to decrease. |
| If the demand for product increase while the supply remains the same, how this efftect the price of the product. | It would increase. |
| When a shortage occurs for a good, what will the government do? | It depends if the product is a necessity and in the national interests of the country. If it is then the government might intervene but if not most likely the government will do nothing. |
| What are the attributes of "Effective Demand"? | 1) good quality 2) low prices 3) availability |
| The satisfaction a buyers gets from one more unit of a produce is called what? | Marginal Return |
| The capacity of a good or service to be useful or provide value is referred to as what? | Ultiltiy |
| The cost which change according to the rate of product is known as what? | 1) Fix Costs 2) Variable Costs |
| Greater output of a product cam result from what? | Higher demand |
| At a price below equilibrium, what happens to demand and supply? | Demand goes up and supply goes down |
| As the price moves up to equilibrium, a raising prices encourages buyers and sellers to do what? | Buyers will continue to demand the product and sellers would continue to supply it |
| As the price of a good or services decreases the quantity the people what to buy increases and visa versa, this is know as what? | The Law of Supply and Demand |
| In a market economy, who determines the price of a product? | The buyer and the seller in the market place. |
| Luxury Goods | Goods that are not necessary for survival but a demnanded usually by those who have enough income andn able to affort usually their high price. |
| Necessary Goods | Goods that are considered important for everyday needs and survival. |
| A change opf tastes by consumers whould lead to what type of movement along the curve? | A downward movement in supply and price |
| List a number of things that might cause the supply curve to shift? | 1) change in demand 2) change in fixed and variable costs 3) natural disasters |
| What is a factor that determines the demand for a product? | 1) price 2) utility |
| What are fixed costs? | Cost in the product of a good that hardly change no matter what. |
| The measure of the relative responsiviness of the amount demanded demanded or supplied to a change in price is? | The more the demand - the lower the supply the lower the demand |
| What are variable cost? | The costs in the production of a product that will change depending on the circumstances.; |
| Surplus | Amount supplied is greater than the amount demanded |
| Shortage | The amount supplied is less than the amount demanded |
| Market Equilibrium | Where the buyer and seller are perfectly happy. Demand and supply are in a perfect relationship. |
| Price Floor | Minimum price charged for goods and services |
| Price Ceiling | Maximum price that can be charged for a good or service |
| Depreciation | Loss in value of capital equipment (machines) in producing a good |
| Law of Deminishing Returns | Where no matter how much is demanded or supplied - There will be no more gain and usually things will move backward and the price and supply decrease |
| Increasing Marginal Returns | The initial increase in production to meet the demand for one more unit of a product. |
| The income effect on demand forces one to do what? | Income has a effect on demand - the more income the more the possible demand (even for luxruy goods) but a decrease in income will lower the demand (and only necessay goods are in demand). |
| What direction does the supply curve go? | From lower left to upper right |
| What direction does the demand curve go? | From the upper left to the lower right |
