Chapter 4 Vocabulary List

Fill in the blank: A ______ is any place where people come together to buy and sell goods or services.

• Market

• Park

• Library

• School

Fill in the blank: ______ is the willingness and ability of buyers to purchase different quantities of a good at different prices during a specific time period.

• Demand

• Supply

• Equilibrium

• Elasticity

Fill in the blank: The ______ states that as the price of a good increases, the quantity demanded of the good decreases, and that as the price of a good decreases, the quantity demanded of the good increases.

• Law of demand

• Law of supply

• Law of diminishing returns

• Law of elasticity

Fill in the blank: ______ is the number of units of a good purchased at a specific price.

• Quantity demanded

• Quantity supplied

• Market price

• Equilibrium quantity

Fill in the blank: The ______ states that as a person consumes additional units of a good, eventually the utility gained from each additional unit of the good decreases.

• Law of diminishing marginal utility

• Law of supply

• Law of demand

• Law of increasing returns

Fill in the blank: A ______ is the numerical representation of the law of demand.

• Demand schedule

• Supply curve

• Equilibrium price

• Market demand

Fill in the blank: A ______ is the graphical representation of the law of demand.

• Demand curve

• Supply curve

• Equilibrium point

• Price level

Fill in the blank: A ______ is a good for which the demand rises as income rises and falls as income falls.

• Normal good

• Inferior good

• Luxury good

• Giffen good

An ______ is a good for which the demand falls as income rises and rises as income falls.

• Inferior good

• Luxury good

• Normal good

• Substitute good

Fill in the blank: A ______ is a good for which the demand remains unchanged as income rises or falls.

• Neutral good

• Luxury good

• Inferior good

• Normal good