Economics Review

A _____________ is a graph that shows the amount of a product that would be bought at all prices in the market

• supply curve

• law of demand

• demand curve

• market demand

Some products, such as DVD players and DVDs, are called ___________ because demand for one moves in the opposite direction as price for the other

• substitutes

• surplus

• elastic

• complements

The methods or services used to make goods and services are called

• factors

• technology

• resources

• production

At the ____________ price there is neither a surplus or a shortage

• profitable

• ceiling

• exchange

• equilibrium

According to the law of demand, quantity demanded and price

• move in the same direction

• depend on marginal utility

• move in opposite directions

• are not related

Diminishing marginal utility is the explanation for the consumer's decision to ________

• buy multiple things for the same price

• buy only one dessert with a meal

• purchase more CDs of a favorite singer

• buy expensive gifts for close friends

Total demand may change if more consumers enter the market, consumer tastes change, or

• consumer expectations change

• substitutes become popular

• demand is inelastic

• supply remains the same

Businesses invest time, money, and other capital resources for the primary motive of ________

• paying good wages

• supplying better products

• making a profit

• satisfying customers' needs

One of the strengths of a market economy is that _________

• prices absorb some of the shocks or unexpected changes in the economy

• most consumers can afford plenty of goods and services they want

• producers almost always make a profit

• the demand is never greater than supply

Economics is the study of how we make decisions in a world of limited

• needs

• wants

• choices

• resources