Microeconimics Key Terms Chapter 3

5 Written Questions

1. the change in consumption resulting from a change in real income
2. the largest dollar amount the buyer would be willing to pay for a good
3. when quantity demanded is more than quantity supplied
4. a movement along the supply curve that occurs in response to a change in price
5. when consumers react to an increase in a good's price by consuming less of that good and more of other goods

5 Matching Questions

1. change in supply
2. economic efficiency
3. sellers surplus
4. complements
5. inferior good

1. a two goods that are bought and used together
2. b A change in the quantity supplied of a good or service at every price; a shift of the supply curve to the left or right.
3. c the difference between the price recived by the seller and his or her reservation price
4. d condition that occurs when all goods and services are produced and consumed at their respective socially optimal levels
5. e a good for which, other things equal, an increase in income leads to a decrease in demand

5 Multiple Choice Questions

1. when quantity supplied is more than quantity demanded
   1. sellers surplus
   2. excess supply
   3. buyers surplus
   4. excess demand
2. a sensory system located in structures of the inner ear that registers the orientation of the head
   1. efficiency
   2. equilibrium price
   3. market equilibrium
   4. equilibrium
3. a change in the quantity demanded of a good or service at every price; a shift of the demand curve to the left or right.
   1. change in quantity demand
   2. change in demand
   3. change in supply
   4. excess demand
4. a graph of the relationship between the price of a good and the quantity demanded
   1. total surplus
   2. market
   3. supply curve
   4. demand curve
5. a graph of the relationship between the price of a good and the quantity supplied
   1. supply curve
   2. demand curve
   3. buyers surplus
   4. substitutes

5 True/False Questions

1. equilibrium quantity → the price that balances quantity supplied and quantity demanded

   True        False

2. substitutes → two goods for which an increase in the price of one leads to an increase in the demand for the other

   True        False

3. buyers surplus → the differnce between the buyers reservation price and the pice he or she actually pays

   True        False

4. socially optimal quantity → the quantity supplied and the quantity demanded at the equilibrium price

   True        False

5. price ceiling → when quantity demanded is more than quantity supplied

   True        False