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ECON 104 Exam 1 With Complete Solutions Latest Update 2024
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ECON 104 Exam 1 With Complete Solutions Latest Update 2024
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ECON 104 Exam 1 With Complete SolutionsLatest Update 2024
Perfectly competitive market - ANS A market in which there are many buyers and
sellers, all the products are identical, and there are no barriers to new sellers
entering the market.
Demand Schedule - ANS A table showing the relationship between the price of a
product and the quantity of the product demanded.
Quantity Demanded - ANS The amount of a good or service that a consumer is
willing and able to purchase at a given price.
Demand Curve - ANS A curve that shows the relationship between the price of a
product and the quantity of the product demanded.
Market Demand - ANS The demand by all the consumers of a given good or
service.
Law of Demand - ANS The rule that, holding everything else constant, when the
price of a product falls, the quantity demanded of the product will increase, and
when the price of a product rises, the quantity demanded of the product will
decrease.
, Substitution Effect - ANS The change in the quantity demanded of a good that
results from a change in price, making the good more or less expensive relative to
other goods that are substitutes.
Income Effect - ANS The change in the quantity demanded of a good that results
from the effect of a change in the good's price on consumers' purchasing power.
Ceteris paribus ("all else equal") - ANS The requirement that when analyzing the
relationship between two variables—such as price and quantity demanded—other
variables must be held constant.
Normal Good - ANS A good for which the demand increases as income rises and
decreases as income falls.
Inferior Good - ANS A good for which the demand increases as income falls and
decreases as income rises.
Substitutes - ANS Goods and services that can be used for the same purpose.
Complements - ANS Goods and services that are used together.
Income, Price of Related Goods, Tastes, Population and Demographics, Expected
Future Prices - ANS 5 things that shift market demand
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