Economics Chapter 2-4 Test

When the demand for a product decreased due to changing consumer preferences

Amount of money that producers make after all the costs of production have been paid

A supply curve

Table that lists each quantity of a product producers are willing to supply

What system enables consumers and producers to communicate to coordinate production decisions?

Economic rivalry among producers or sellers of similar goods for customers or markets

Many consumers will continue to buy home heating oil even if the price increases.

Science of production

Demand schedules and demand curves show that the relationship between price and demand is

When more units of a product are consumed, the utility received declines

A group that is formally bound together to regulate production  and sale of a good or service.

Plots the information from a demand schedule onto a graph

In the case of supply, as price increases

The needs of producers and consumers are best met at a point called _______ equilibrium.

An increase in price causes a decrease in the quantity demanded and vise versa

What do prices provide for owners to sell their resources and products?

Lower resource prices result in

Items that are necessities or for which there are many substitutes are said to have

Regardless of price producers are unable or unwilling to deal with the supply of a product

The point at which the supply and demand curves for a product intersect.

A decrease in supply shifts the supply curve

Substitute goods and complementary goods are known as

Plays a major role in guiding the actions of producers and consumers

Changes in a good's price affect the quantity demanded by consumers

Occurs when the quantity produced exceeds the quantity demanded at the price offered

Amount of money individuals have available to spend on goods and services

The sum of the fixed and variable costs of production is the

The type of marketing in which the producer approaches the consumer on a one to one basis

Nonprice factors that affect demand

Government regulation that prohibits prices from rising above a certain maximum level

Occurs when the quantity demanded exceeds the quantity supplied at the price offered

Tendency to vary production based on price

Amount of a good or service a consumer is willing and able to buy at various prices

What do suppliers do when a surplus occurs?

Consumers substitute a lower-priced product for a more expensive product

Price ceilings tend to result in

A resource is added to a fixed supply, the output may increase but will eventually decrease.

Extra costs incurred by producing more unit of output

A change in the quantity supplied means a change in the amount of a product for sale 

What does the price system promote?

Government regulation that prohibits prices from falling below a certain minimum level

Prices serve as an ________ function to provide data to owners, consumers, and producers

Occurs when the supply and demand for a product are equal

Producers significantly change production to small increases in a product's price

Wages and salaries, rents interest and payments

Products that have elastic supply

The money invested in a promising new business that is considered a risk is called

Negative side effects that affect people not connected with the production or consumption

An inelastic demand curve

Table that lists the quantity of goods that consumers are willing and able to buy

Quantity of goods and services that producers offer at each price

Increase or decrease in purchasing power caused by changes in prices