Econ Quiz 6

1.                  The number of products that a firm is willing to sell is also known as the number it is willing to supply.

2.                  demand_ is when a good or service is actually sold.

3.                  Consumer goods and services are sold in the product market_.

4.                  The four factors of production are sold in the factor market_.

5.                  If a change in price results in a smaller relative change in the quantity sold, the product involved probably has inelastic demand_.

6.                  If a change in price results in a larger relative change in the quantity sold, the product involved probably has elastic demand_.

7.                  A table that shows the number of items that could be sold at various prices is called a demand schedule_.

8.                  A graph that shows the number of items a firm would be willing to sell at various prices is called a supply curve_.

9.                  The fact that after a point the costs of production per item increase as the number produced grows shows diminishing returns_.

10.              A chart that shows the flow of money, goods and services, and the four factors of production is called a circular flow model_.

11.              A table that shows the number of items a firm would be willing to sell at various prices is called a supply schedule_.

12.              A graph that shows the number of items that would be sold at various prices is called a demand curve_.

13.              Two goods that are used together are called complements_.

14.              Two goods that can be used in place of each other are substitute goods_.

15.              A market price above the equilibrium price will result in a surplus_ of the product.

16.              The principle that says people will buy more of a product at a lower price than they will at a higher price (if nothing else changes) is the law of demand_.

17.              A market price below the equilibrium price will result in a shortage_ of the product.

18.              The relationship between a change in price and a change in the quantity sold is called elasticity_.

19.              A product’s supply and demand curves will intersect at a pt. of equilibrium_.

20.              Factors that can cause a demand curve to move to the left or right are called determinants of demand_.

21.              The principle of economics that states that at higher prices producers will be willing to offer more products for sale than at lower prices is called the law of supply_.