Markets
Supply & Demand
The U.S. Economy
Elasticity
Government and Market Failure
100
An institution that brings together buyers ("demanders") and sellers ("suppliers") of particular goods, services, or resources.
What is a market?
100
A schedule or a curve that shows the various amounts of a product that consumers are willing and able to purchase at each of a series of possible prices during a specified period of time.
What is demand?
100

In the circular flow model, these entities consume the goods and services produced by the bussinesses.

What are households?

100
THe responsiveness of consumers to a price change is measured by a product's _____.
What is the price elasticity of demand?
100
Unerproduction and underallocation of resources result when these are present.
What are spillover benefits or positive externalities?
200
This effect indicates that a lower price increases the purchasing power of a buyer's money income, enabling the buyer to purchase more of the product than she or he could buy before.
What is the income effect?
200
A schedule or curve showing the amounts of a product that producers are willing and able to make available for sale at each of a series of possible prices during a specific period.
What is supply?
200

Where firms get their work force from in the circular flow model

What is a factor market?

200
When a percentage change in price and the resulting percentage change in quantity demanded are the same.
What is unit elasticity?
200

Market failure that occurs when people benefit from resources without paying for them

What is the free rider problem?

300
In any specific time period, each buyer of a product will derive less satisfaction from each successive unit of the product consumed.
What is the law of diminishing marginal utility?
300
Preferences, income, number of buyers, price of related goods, and consumer expectations.
What are the non-price determinants of demand?
300

Tax on imported goods

What is a tariff?

300
The price-elasticity formula.
What is % change in quantity demanded ÷ % change in price?
300
A tax whose average rate increases as income increases.
What is a progressive tax?
400
This effect suggests that at a lower price buyers have the incentive to substitute what is now a less expensive product for similar products that are now relatively more expensive.
What is the substitution effect?
400
As price rises, the quantity supplied rises; as price falls, the quantity supplied falls.
What is the law of supply?
400

Limits on the number of imported goods

What is a quota?

400
This measures how sensitive consumer purchases of one product are to a change in the price of some other product.
What is the cross elasticity of demand?
400

Commodity or service that every member of a society can use without reducing its availability to all others

What is a public good?

500
Graphically, the intersection of the supply curve and the demand curve for a product indicates this.
What is the market equlibrium?
500
This exists when the demand for a good or service exceeds the supply of the good or service.
What is a shortage?
500

Households supply this in the circular flow model

What is labor?

500
The midpoint formula for the price elasticity of demand coefficient.
What is (change in quantity ÷ (sum of quantities ÷ 2)) ÷ (change in price ÷ (sum of prices ÷ 2))?
500

Market condition in which there is only one buyer, usually for labor

What is a monopsony?

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