Question Answer
demand the desire, willingness, and ability to buy a good or service.
demand schedule a table that lists the various quantities of a product or service that someone is willing to buy over a range of prices.
demand curve a graph that shows the amount of a product that would be brought at all possible prices in the market.
law of demand the concept that people are normally willing to buy less of a product if the price is high and more of it if the price is low.
market demand the total demand of all consumers for their product or service.
utility the pleasure, usefulness, or satisfaction we get from using the product.
marginal utility additional use that is derived from each unit acquired.
substitute a competing product that consumers can use in place of another.
complement product often used with another product.
demand elasticity measure or responsiveness relating change in quantity demanded to a change in price.
supply the amount of goods and services that producers are able and willing to sell at various prices during a specified time period.
law of supply the principle that suppliers will normally offer more for sale at higher prices and less at lower prices.
supply schedule table showing quantities supplied to a change in price.
supply curve upward-sloping line that graphically shows the quantities supplied at each possible price.
profit the money a business receives for it products or services over and above its costs.
market supply the total of all the supply schedules of all the businesses that provide the same good or supply
productivity the degree to which resources are being used efficiently to produce goods and services.
technology the methods or processes used to make goods and services.
subsidy a government payment to an individual, business, or group in exchange for certain actions.
supply elasticity responsiveness of quantity supplied at different possible prices.
surplus a situation in which quantity supplied is greater than quantity demanded; situation in which government spends less than it collects in revenues.
shortage a amount by which the quantity demanded is higher than the quantity supplied.
equilibrium price the price at which the amount producers are willing to supply is equal to the amount consumer are willing to buy.
price ceiling a maximum price set by the government that can be charged for goods and services.
price floor a government minimum price that can be charged for goods and services.
minimum wage the lowest legal wage that can be paid to most workers, is a price floor.
chapter 21

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