| A | B |
|---|
| surplus | The result of quantity suplied being greater than quantity demanded is called |
| market equilibrium | The situation in which the quantity supplied of a good at a particular price is equal to the quantity demanded at that price is called |
| shortage | The result of the quantity demanded being greater than the quantity suplied is called |
| Consumers and Producers | The equilibrium price in the market is determined by |
| Supply | the willingness and ability of producers to offer goods and services for sale |
| quantity supplied increases | According to the law of supply, when prices increase |
| fixed costs remain the same; variable costs depend on how much is produced | The difference between fixed cost and variable cost is that |
| fixed cost and variable cost | Total cost is the sum of |
| desire for a good or service and the ability to pay for it | What two factors are necessary for demand |
| Elasticity of demand | Which economic concept is defined as the measure of how responsive consumers are to price change |
| substitution effect | What term is defined as the change in the amount consumers will buy because they can buy a different product instead? |
| normal goods | What term is defined as goods that consumers demand more of when their income rises? |
| Inelastic | If quantity demanded does not change significantly when price changes, how is demand described? |
| change in quantity demanded | What do various points on a demand curve represent? |
| total revenue minus total cost | How does a business calculate total profit? |
| quantity demanded increases | According to the law of demand, what happens when prices go down? |
| law of diminishing marginal utility | When you are hungry you receive the most satisfaction from the first piece of pizza and less satisfaction from each additional piece of pizza, what explains this? |
| inferior goods | What are products that consumers demand less of when their income rises? |
| Steep slope | What does an inelastic demand curve look like? |
| no competition and there are no substitutes for their proudct | Monopolis are able to control prices because they have |
| many buyers and few sellers | With monopolistic competition there are |
| decrease the supply of product it doesnt want people to use | The government uses excise taxes to |
| how elastic a supply is | The ease of changing production to respond to price change determines |
| Income | A factory closes, laying off hundreds of workers, an consumer spending in the town falls. what factor is affecting demand? |
| market size | Skiers flock to a town in the Rockies in January, and restaraunt business booms. What factor is affecting demand? |
| substitutes | Many U.S consumers have switched to wireless phones from traditional phones. Which factor is affecting demand? |
| consumer expectation | Dylan's family buys next years winter clothes in February to benefit from the end of season sales, what factor affects their demand for clothes? |
| consumer taste | As gardener's try to make their yard a place for quiet retreat, sales of backyard fountains increased. What factor affecting demand does this illustrate? |
