Chapter 3

Question 1

change in demand

Answer 1

shift of the demand curve

Question 2

change in supply

Answer 2

shift of the supply curve

Question 3

change in the quantity demanded

Answer 3

movement along the demand curve

Question 4

change in the quantity supplied

Answer 4

movement along the supply curve

Question 5

competitive market

Answer 5

many buyers and sellers that have no influence on price

Question 6

complement

Answer 6

a good used with another good

Question 7

demand

Answer 7

price versus quantity demanded; negative relationship

Question 8

equilibrium price

Answer 8

price where demand equals supplied

Question 9

equilibrium quantity

Answer 9

quantity where demand equals supplied

Question 10

inferior good

Answer 10

good for which demand decreases

Question 11

law of demand

Answer 11

higher the price, the smaller the quantity demanded of a good

Question 12

law of supply

Answer 12

higher the price, the greater the quantity supplied of a good

Question 13

normal good

Answer 13

demand increases as income increases

Question 14

relative price

Answer 14

ratio of the prices; an opportunity cost

Question 15

substitute

Answer 15

good used in place of another good

Question 16

supply

Answer 16

price versus quantity supplied; positive relationship

Question 17

complements in production

Answer 17

goods that must be produced together (by-products)