Economics Unit 2 Review

 the consumers willingness and ability to purchase a given good

• demand

• supply

• surplus

• shortage

as the price of a good decreases, the quantity demanded of that good increases.

• Supply

• Law of Demand

• Law of Supply

• Demand

When the price of a good decreases, consumers will substitute away from goods that are relatively more expensive to cheaper goods

• Substitution effect

• Income Effect

• Equilibrium Price

• Price ceiling

When the price of a good decreases, it is as if the buyer of the good’s income went up

• Substitution Effect

• Fake News

• Price floor

• Income effect

 the total amount of a specific good/service that is available to consumers.

• Supply

• Demand

• Law of Supply

• Law of Demand

 the exact price where the quantity of goods supplied is equal to the quantity of goods demanded.

• Price Floor

• Price Ceiling

• Equilibrium Price

• Surplus

a situation in which the demand for a good/service exceeds its supply in a market.

• Surplus

• Shortage

• Price Floor

• Price Ceiling

 a situation in which the demand for a good/service is less than its supply in a market.

• Shortage

• Surplus

• Price Floor

• Price Ceiling

the lowest legal price that a good/service can be sold for

• Low point

• High Point

• Price Floor

• Price Ceiling

the highest legal price that a good/service can be sold for

• Low Point

• High Point

• Price Floor

• Price Ceiling