1.
Prices and Inputs are the forces that make market economies work.
2.
The term supply and demand refer to the behavior of people as they interact with one another in a monopolistic market.
3.
A market is a group of households and firms of a particular good or service.
4.
A less organized market has buyers and sellers who meet at a specific time and place, where an auctioneer helps set price and arrange sales.
5.
Price and quantity are determined by all buyers and sellers as they interact in the marketplace.
6.
Economists use the term competitive market to describe the a market in which there are so many buyers and so many sellers that each has a negligible impact on the market.
7.
What are the two characteristics of the highest form of competition in the market?
A. 
The buyers and sellers are so numerous that no single buyer or seller has any influence over the market price.
B. 
The buyers and sellers are only few that they directly influence the market price.
C. 
The goods offered for sale are exactly the same
D. 
The goods offered for sale are different.
8.
Because buyers and sellers in perfectly competitive market mus accept the price the market determines, they are said to be price takers.
9.
Perfecetly competitive markets are the easiest to analyze because everyone participating in the market takes the price as given by market conditions.
10.
The quantity demanded of any good is the amount of the good that sellers are willing to sell to the market.
11.
The demand schedule is a table that shows the relationship between the supply of the good and the quantity demanded, holding constant everything else.
12.
The downward-sloping line relating price and quantity demanded is called the demand curve.
13.
To analyze how market works, we need to determine the market demand.
14.
Because the market demand curve holds other things constant, it need not be stable over time.
15.
An increase in demand shifts the curve to the right, and a decrease shifts the curve to the left.
16.
What are the 5 most important variables that can shift the demand curve?
A. 
B. 
C. 
D. 
E. 
F. 
G. 
17.
A curve shifts when there is a change in a relevant variable on either axis.
18.
Tobacco and marijuana appears to be complements rather than substitutes.
19.
Quantity supplied has a positive correlation with price.
20.
Market demand and supply is the average demand and supply of all buyers and sellers respectively.
21.
What are the 4 most important factors that influence the quantity supplied.
A. 
B. 
C. 
D. 
E. 
F. 
22.
At the equilibrium price, the quantity of the good that buyers are willing and able to buy exactly balances the quantity of that sellers are willing and able to sell.
23.
The equilibrium price is sometimes called the market-balancing price, because at this price, everyone in the market has been satisfied.
24.
The action of buyers and sellers naturally move markets toward the equilibrium of supply and demand.
25.
A surplus is sometimes called a situation of excess demand.