Vocabulary
What is a consumer?
someone who buys goods or services
What is the substitution effect?
When the price of a good increases, people will buy a less expensive substitute.
If your production cost is $6 and your price is $10, what is your profit?
$4
(10-6=4)
What type of resource is a human-made good that is used in the production process?
Capital resource
Name 2 factors that can impact demand.
income, population, trends, substitutions
Name 3 products that were presented to you.
Any 3 of the 13 products
What is the definition of microeconomics?
Microeconomics studies the way individuals and businesses make decisions.
Give 3 examples of a human resource
What are 3 ways producers can compete with each other?
deals, customer service, variety of products, resources used, price, advertisements
What is a surplus?
When the quantity demanded is less than the quantity supplied.
Explain how the cost of an item is different from its price.
The cost is the amount of money it takes for producers to make a product. The price is the amount of money it is being sold to consumers for.
What can a producer do if they are experiencing a shortage in their supply?
(The amount demanded is greater than the amount supplied)
Answers will vary.
What is an equilibrium price?
The price where the quantity demanded and quantity supplied are equal.
As price increases, producers are willing and able to supply more of a good or service. As price decreases, producers are willing and able to supply less of a good or service.
When there is a decrease in demand, will the equilibrium price increase or decrease?
decrease