Econ Chp. 3

5 Written Questions

1. the input/factor market in which households supply land or other real property in exchange for rent
2. the markets in which goods and services are exchanged
3. the inputs into the production process. Land, labor, and capital are the 3 key factors of production
4. increased market price = increase in quantity supplied
   decreased market price = decrease in quantity supplied
5. the amount of a product that a firm would be willing and able to offer for sale at a particular price during a given time period

5 Matching Questions

1. movement along a supply curve
2. movement along a demand curve
3. demand curve
4. complements, complementary goods
5. supply curve

1. a goods that "go together"; a decrease in the price of one results in an increase in demand for the other and vice verca
2. b a graph illustrating how much of a given product a household would be willing to buy at different prices
3. c the change in quantity demanded brought about by a change in price
4. d the change in quantity supplied brought about by a change in price
5. e a graph illustrating how much of a product a firm will sell at different prices. Curves upward

5 Multiple Choice Questions

1. a person who organizes, manages, and assumes the risks of a firm, taking a new idea or a new product and turning it into a successful business
   1. land market
   2. normal goods
   3. net worth
   4. entrepreneur
2. goods that can serve as replacements for one another; when the price of one increases, demand for the other increases
   1. substitutes
   2. perfect substitutes
   3. labor market
   4. supply curve
3. wealth
   1. land market
   2. firm
   3. demand curve
   4. net worth
4. the consuming units in an economy
   1. firm
   2. normal goods
   3. household
   4. net worth
5. the sum of all that is supplied each period by all producers of a single product
   1. quantity supplied
   2. market demand
   3. law of supply
   4. market supply

5 True/False Questions

1. capital market → the input/factor market in which households supply their savings, for interest or for claims to future profits, to firms that demand funds to buy capital goods

   True        False

2. demand schedule → a graph illustrating how much of a given product a household would be willing to buy at different prices

   True        False

3. quantity demanded → the amount of a product that a firm would be willing and able to offer for sale at a particular price during a given time period

   True        False

4. market demand → the sum of all the quantities of a good or service demanded per period by all the households buying in the market for that good or service

   True        False

5. inferior goods → goods for which demand goes up when income is higher and for which demand goes down when income is lower

   True        False