2

Question 1

is a fundamental
and powerful tool that can be applied to a
wide variety of interesting and important
problems.

Answer 1

Supply-demand analysis

Question 2

Relationship between the quantity of
a good that producers are willing to sell and the price
of the good.

Answer 2

Supply curve

Question 3

The supply curve is thus a relationship between the quantity
supplied and the price. We can write this relationship as an
equation:

Answer 3

QS = QS(P)

Question 4

Relationship between the
quantity of a good that consumers are willing to
buy and the price of the good.

Answer 4

Demand curve

Question 5

We can write this relationship between
quantity demanded and price as an equation:

Answer 5

QD = QD(P)