Chapter 2 Microeconomics Definitions Turbo Quiz

Decisions on resource allocation are guided by the state

• Free market economy

• Centrally planned economy

• Mixed economy

• Socialist economy

_________ _________ : A Latin phrase meaning ‘other things being equal’; it is used in economics when we focus on changes in one variable while holding other influences constant

Competitive demand: Demand for goods that are in competition with each other (these goods are also known as _____________ goods)

Complements: Two goods are said to be complements if people tend to consume them jointly, so that an increase in the price of one good causes the _________ for the other good to _____

• supply; rise

• supply; fall

• demand; rise

• demand; fall

Composite demand: Demand for a good that has _________ _____

Consumer surplus: The difference between the price consumers are willing and able to pay for a good or service and the price they ________ ____

The responsiveness of quantity demanded for one product in relation to a change in the price of another product

• PED

• PES

• YED

• XED

Cross Price Elasticity of Demand: The responsiveness of ??? for one product in relation to a change in the ??? of another product

• Price; Quantity supplied

• Price: Quantity demanded

• Quantity demanded; Price

• Quantity supplied; Price

The quantity of a product that consumers are willing and able to purchase at various prices over a given time period (assuming ceteris paribus)

• Demand

• Supply

• Consumer Surplus

• Producer Surplus

Demand for a factor of production or a good which derives not from the factor or the good itself but from the goods it produces

• Joint demand

• Derived demand

• Competitive demand

• Composite demand