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What happens when there is a shortage in the market?

Prices rise, signaling producers to produce more and consumers to purchase less.

What does the Law of Supply state?

There is a direct relationship between price and quantity; as price increases, so does the quantity supplied.

What is a complementary good?

A product that is often used with another product.

What is the economic term for a consumer's satisfaction with their purchasing decision?

Utility.

What does it mean if the demand for a product is elastic?

The demand for that product is greatly influenced by its price.

What is an example of the substitution effect?

A consumer buying margarine instead of butter.

What is technology in an economic context?

Any use of land, labor, and capital that produces goods more efficiently.

What is created by the coming together of buyers and sellers?

A market.

What is voluntary exchange?

What takes place between buyers and sellers once they have agreed on a price.

What is a surplus?

The situation in which quantity supplied is greater than the quantity demanded at the current price.

List the three Factors of Production.

Land, labor, and capital.

What are the three Basic Economic Questions?

What to produce, how to produce, and for whom to produce.

Give an example of two complementary goods.

Peanut butter and jam.

Provide an example of two substitute goods.

Butter and margarine.

Give an example of a product that has inelastic demand.

Insulin or gas.