1. It’s in demand
Supply’s the
limit
f(production)
The Price
Is Right
How
Competitive
are you?
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500 1

2. The desire and ability to buy a product.2

3. What is demand? 3

4. Changes in quantity demanded and changes in price have a(n) _________ relationship4

5. What is inverse? 5

6. Getting less and less satisfaction from consuming additional units of a product.6

7. What is diminishing marginal utility?7

8. When this happens, you will see movement along the demand curve.8

9. What is a change in price?9

10. Economists use this test to measure demand elasticity.10

11. What is the total revenue (or expenditures) test?11

12. The quantity of a product businesses are willing to make at various prices.12

13. What is supply? 13

14. The relationship between price and quantity supplied.14

15. What is direct? 15

16. A government payment to encourage or protect economic activity16

17. What is a subsidy? 17

18. Responsiveness of the quantity supplied to a change in price.18

19. What is supply elasticity?19

20. This happens to supply when there is a price increase.20

21. What is nothing (or an increase in quantity supplied)?21

22. The stage of production at which the concept of diminishing marginal returns can be seen.22

23. What is Stage II? 23

24. The change in total income when you produce one more of a product24

25. What is marginal revenue?25

26. Producers know, when they reach this point, that they have maximized profit.26

27. What is marginal costs = marginal revenue (MC=MR)?27

28. Costs of production that do not change when output changes.28

29. What are fixed costs or overhead?29

30. The extra cost incurred when producing one more unit of output.30

31. What are marginal costs?31

32. Low prices signal consumers to do this.32

33. What is buy more? 33

34. The point at which quantity supplied equals quantity demanded at a specific price.34

35. What is equilibrium? 35

36. The opposite of a shortage.36

37. What is a surplus? 37

38. A legally established price below equilibrium.38

39. What is a price ceiling? 39

40. Economists argue that this is the most efficient way to allocate resources.40

41. What are competitive markets?41

42. This establishes the equilibrium price under perfect competition.42

43. What are supply and demand?43

44. The opposite of pure competition.44

45. What is monopoly? 45

46. Second hand smoke is and example of this.46

47. What is a negative externality?47

48. A product that is consumed collectively and whose use by one individual does not diminish the satisfaction or value to others. 48

49. What is a public good? 49

50. A flaw in the market system that prevents the efficient allocation of resources.50

51. What is a market failure, externality or spillover?51