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 What is the term for the various quantities of a good or service that producers are willing to sell at all possible market prices | Supply |
| What is the principle that suppliers will normally offer more for sale at higher prices and less at lower prices | Law of supply |
| What happens to the supply of a good if its price rises | Supply increases |
| What is a supply schedule | a numerical chart that illustrates the law of supply |
| What is a supply curve | a graph that shows the amount of a product that would be supplied at all possible prices in the market |
| Why does the supply curve slope upward | Suppliers are generally willing to offer more goods and services at a higher price and fewer at a lower price |
| What three things affect supply | cost of resources, government policies, expectations |
| What happens to a company's cost when workers are more productive | costs decrease |
| What is the term for a government payment to an individual, business, or other group for certain actions | subsidy |
| What is the term that describes how supply changes in response to changes in price | supply elasticity |
| What is the amount by which the quantity supplied is higher than the quantity demanded | surplus |
| What does a surplus signal | Price is too high |
| What is the amount by which the quantity demanded is higher than the quantity supplied | shortage |
| What is the benefit of a market economy when it operates without restriction | shortages and surpluses are eliminated |
| What is the point where supply and demand achieve balance | equilibrium price |
| What is the maximum price set by the government that can be charged for goods and services | Price ceiling |
| What is a price floor | a government minimum price that can be charged for goods or services |
| Why are prices neutral in a competitive market economy | Prices are the result of competition between buyers and sellers |
| What is one of the strengths of the price system | ability to absorb unexpected shocks |
| How does the government in a command economy act differently from a competitive market economy | government planners determine the total quantity of goods produced, government limits product variety to keep production costs down, not enough items are produced to satisfy everyone |
| What can cause market demand to change | more consumers enter the market, the incomes, tastes, and expectations of the consumers in the market change, the prices of related goods changes |
| Which direction does the demand curve shift when demand goes up | Right |
| What are products called when they can be used in place of one another | Substitutes |
| What is the term for products that are used together | Complements |
| When the price of one product increases, what happens to demand for its complement | Demand decreases |
| What is the only factor that can directly cause a change in the quantity of a product | A change in the product's own price |
| What is it called when a change in price causes a change in the quantity demanded | Demand elasticity |
| What kinds of items generally have elastic demand | Expensive items |
| What is it called when price changes have little effect on the quantity demanded | Inelastic demand |
| What happens to demand on necessities if the price increases | Demand stays the same because demand on necessities is inelastic |
| What is the desire, willingness, and ability to buy a good or service called | demand |
| What is a table that lists the various quantities of a product or service that someone is willing to buy over a range of prices called | supply schedule |
| What is a graph that shows the amount of a product that would be bought at all possible prices in the market called | demand curve |
| Why does a demand curve usually slope downward | People are normally willing to buy less of a product if the price is high and more if the price is low. |
| What does the law of demand say | Quantity demanded and price move in opposite directions |
| What is the total demand of all consumers for a company's product or service called | market demand |
| How could you measure the demand in an area for a particular good or service | by visiting shops that provide that good or service to gauge the reactions of consumers to different prices, by polling consumers about prices, by studying data compiled over past years, which would show consumer reactions to prices |
| What is the term for the pleasure, usefulness, or satisfaction we get from using a product | utility |
| What is the term for additional satisfaction from each use of a product or service you buy | marginal utility |
| Why are most people not as willing to pay as much for the second item as for the first | marginal utility diminishes when we consume more of a product |