Economics Unit 2 Vocabulary

What is the term for the willingness and ability of consumers to purchase a good or service at a given price?

• Supply

• Demand

• Elasticity

• Subsidy

Which branch of economics studies the behavior of individuals and firms in making decisions regarding the allocation of resources?

• Macroeconomics

• Microeconomics

• Econometrics

• Behavioral Economics

What is the term for a factor that motivates individuals to perform an action?

• Demand

• Incentive

• Elasticity

• Subsidy

What is the graphical representation of the relationship between the price of a good and the quantity demanded?

• Supply Curve

• Demand Curve

• Market Supply Curve

• Equilibrium Curve

Which law states that, all else being equal, as the price of a product increases, quantity demanded decreases?

• Law of Supply

• Law of Demand

• Law of Diminishing Returns

• Law of Marginal Utility

What is the additional satisfaction or utility that a consumer receives from consuming one more unit of a good or service?

• Total Utility

• Marginal Utility

• Average Utility

• Incremental Utility

What effect describes the change in consumption resulting from a change in real income?

• Substitution Effect

• Income Effect

• Price Effect

• Demand Effect

What effect occurs when consumers replace a more expensive item with a less expensive alternative?

• Income Effect

• Substitution Effect

• Price Effect

• Demand Effect

What term describes the measure of how much the quantity demanded of a good responds to a change in price?

• Elasticity

• Demand

• Supply

• Incentive

What is the term for the total amount of a specific good or service that is available to consumers?

• Demand

• Supply

• Elasticity

• Subsidy