econ ch. 4

Question 0

microeconmics

Answer 0

is the area of economics that deals with behavior and decision making by small units, such as individuals and firms

Question 1

demand

Answer 1

the desire, ability, and willingness to buy a product

Question 2

demand schedule

Answer 2

a listing that shows the various quantities demanded of a particular product at all prices that might prevail in the market at a given time

Question 3

demand curve

Answer 3

a graph showing the quantity demanded at each and every price that might prevail in the market

Question 4

law of demand

Answer 4

the quantity demanded of a good or service varies inversely with its price

Question 5

market demand curve

Answer 5

the demand curve that shows the quantites demanded by everyone who is interested in purchasing the product

Question 6

marginal utility

Answer 6

the extra usefulness or satisfaction a person gets from acquiring or using one more unit of a product

Question 7

diminshing marginal utility

Answer 7

that the extra satisfaction we get from using additional quantities of the product begins to diminish

Question 8

change in quantity demanded

Answer 8

a movement along the demand curve that shows a change in the quantity of the product purchased in response to a change in price

Question 9

income effect

Answer 9

the change in quantity demanded because of a change in price that alters consumers real income

Question 10

the substitution effect

Answer 10

is the change in quantity demand because of the change in relative price of the product

Question 11

change in demand

Answer 11

bevcause people are now willing to buy different amounts of the product at the same prices

Question 12

substitutes

Answer 12

because they can be used in place of other products

Question 13

complements

Answer 13

other related goods

Question 14

elasticity

Answer 14

a measure of responsiveness that tells us how a dependent variable such as quantity responds to a change in an independent variable such as a price

Question 15

demand elasticity

Answer 15

the extent to which a change in price causes a change in the quantity demanded

Question 16

elastic

Answer 16

when a given change in price causes a relatively larger change in quantity demanded

Question 17

inelastic

Answer 17

that a given change in price causes a relatively smaller change in the quantity demanded

Question 18

unit elastic

Answer 18

a given change in price causes a proportional change in quantity demanded

Question 19

ch. 6

Answer 19

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Question 20

price

Answer 20

the monetary value of a product as established by supply and demand-is a signal that helps us make our economic decisions

Question 21

rationing

Answer 21

a system in which an agency such as government decides everyones fair share

Question 22

ration coupon

Answer 22

a ticket or receipt that entitles the holder to obtain a certain amount of product

Question 23

rebate

Answer 23

a partial refund of the original price of the product

Question 24

economic model

Answer 24

a set of assumptions that can be listed in a table, illustrated with a graph, or even stated algebraically- to help analyze behavior and predict outcomes

Question 25

market equilibrium

Answer 25

a situation in which prices are relatively stable, and the quantity of goods or services supplied is equal to the quantity demanded

Question 26

surplus

Answer 26

a situation in which the quantity supplied is greater than the quantity demanded at a given price

Question 27

shortage

Answer 27

a situation in which the quantity demanded is greater than the quantity supplied at a given price

Question 28

Equilibrium Price

Answer 28

is the price that “clears the market” byleaving neither a surplus nor a shortage at the end of trading period

Question 29

price ceilings

Answer 29

a maximum legal price that can be charged for a product

Question 30

minimum wage

Answer 30

the lowest legal wage that can be paid to most workers, in a case in point

Question 31

price floor

Answer 31

lowest legal price that can be paid for a good or service

Question 32

targe price

Answer 32

which is essentailly a price floor for farm products

Question 33

nonrecoure loan

Answer 33

a loan that carries neither a penalty nor further obligation to repay if not paid back-the farmer could get at least the target price for his or her crops

Question 34

deficiency payment

Answer 34

a check sent to producers that makes up the difference between the actual market price and the target price