(3) Price Determination

Question 1

Competing supply

Answer 1

When resources can be used to produce one good or another good. Not both

Question 2

Complementary goods

Answer 2

Goods in joint demand: these goods are often bought together

Question 3

Composite demand

Answer 3

Demand for a multi-purpose goods.

Question 4

Cross elasticity of demand

Answer 4

Measures the responsiveness of a goods demand to a change in the price of a different goods

Question 5

Elasticity

Answer 5

The proportionate responsiveness of a second variable to a change in a first variable

Question 6

Income elasticity of demand (YED)

Answer 6

Measures the responsiveness of a goods demand to a change in the incomes of consumers

Question 7

Inferior good

Answer 7

A good for which demand rises as income falls

Question 8

Joint supply

Answer 8

When one good is produced, another good is also produced from the same raw materials

Question 9

Normal good

Answer 9

A good for which demand rises as income rises

Question 10

Price elasticity of supply

Answer 10

Measures the responsiveness of a goods supply to a change in price

Question 11

Allocative efficiency

Question 12

Productive efficiency