Microeconomics Chapter 3

What does the law of demand state?

Graphically, the market demand curve is:

The relationship between quantity supplied and price is _____ and the relationship between quantity demanded and price is _____.

A demand curve indicates what?

What do the income and substitution effects account for?

When an economist says that the demand for a product has increased, this means that:

By an increase in demand we mean that :

The quantity demanded of a product increases as its price declines because the:

The law of supply indicates that:

The upward slope of the supply curve reflects the:

A surplus of a product will arise when price is:

If we say that a price is too high to clear the market, we mean that:

Productive efficiency refers to:

If an economy produces its most wanted goods but uses outdated production methods, it is:

Allocative efficiency is concerned with:

Allocative efficiency involves determining:

The equilibrium price and quantity in a market usually produces allocative efficiency because:

Price floors and ceiling prices:

A price floor means that:

An effective ceiling price will:

An effective price floor will:

Price ceilings and price floors:

A price ceiling means that:

If a legal ceiling price is set above the equilibrium price: