Unit 2 Study Guide

2. the law of ___ says producers will offer more as the price increases, and less as price decreases
3. when supply exceeds demand this results
5. when demand exceeds supply this results
8. how responsive producers and consumers are to a price change
9. ___ cost is the time and effort it takes for a consumer to engage in a market exchange
11. two goods that are bought and used together
12. market demand is the ___ of all individual consumer demand
13. ___ efficiency occurs when firm produces at lowest cost per unit
14. the standard supply curve slopes this way
16. the point at which demand equals supply
18. price ___ is set by government below the equilibrium price
19. price ___ is set by government above the equilibrium price

1. ___ effect occurs when a consumer reacts to a good's price increase by buying another good
4. difference between amount a business earns and amount it spent producing the good
6. it's measured by the desire to own something and ability to pay for it
7. (2 words) refers to your purchasing power
10. ____ efficiency occurs when firm produces output most valued by consumers
15. the standard demand curve slopes this way
17. the law of diminishing marginal ___; as each unit is consumed its usefulness decreases