Economics Midterm 1 ) (Solved Questions 100% VERIFIED QUESTIONS AND ANSWERS)

Economics Midterm 1 Law of Supply and Demand the claim that the price of any good adjusts to bring the quantity supplied and demanded for the good into balance Shortage a situation in which quantity demanded is greater than quantity supplied Surplus a situation in which quantity supplied is greater than quantity demanded Equilibrium Quantity the quantity supplied and the quantity demanded at the equilibrium price Equilibrium Price the price that balances quantity supplied and quantity demanded Equilibrium a situation in which the market price has reached the level at which quantity supplied equals quantity demanded Supply Curve a graph of the relationship between the price of a good and the quantity supplied role of producers in the market Supply Schedule a table that shows the relationship between the price of a good and the quantity supplied Law of Supply the claim that other things being equal, the quantity supplied of a good rises when the price of the good rises positive relationship Quantity Supplied the amount of a good that sellers are willing and able to sell Complements two goods for which an increase in the price of one leads to a decrease in the demand for the other consume together Substitutes two goods for which an increase in the price of one leads to an increase in demand for the other consume instead of the other Inferior Good a good for which, other things being equal, an increase in income leads to a decrease in demand Normal Good a good for which other things being equal, an increase in income leads to an increase in demand