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Unit 2 Study Guide & Review Questions
Unit 2 (Ch. 4, 5, & 6)
Concepts/Vocab to Know:
Quantity demanded
Law of Demand
Law of diminishing marginal utility
Substitution Effect
Income Effect
Individual demand schedule
Market Demand Schedule
Demand Curve
Normal Goods
Inferior Goods
Quantity Supplied
Law of Supply
Law of Diminishing Marginal Returns
Individual Supply Schedule
Market Supply Schedule
Supply Curve
Market Supply & Demand Schedule
Price Floor
Price Ceiling
Both Curves shifting & indeterminate outcomes
Models to know:
Supply and Demand
o Movements along a given curve as opposed to a shift of the curve
o Determinants that shift the supply and demand curves
o Which way increases and decreases shift the curves
o Equilibrium and changes to equilibrium
o Shortages and surpluses and how the market will correct
o Floors and ceilings and where they have an effect and where they don’t
Be able to:
Analyze scenarios to pick out the determinant and which curve it affects
Understand how a determinant will affect a respective curve and what that shift will result in
Analyze changes in market equilibrium
Read, analyze, and interpret data from a market graph or schedule
Apply floors and ceilings to markets and analyze impact on the market