Econ 705 Module 1 Questions And Answers 100% Verified A+ Guaranteed

What is considered a "normal" good by economists? {Ans: A good for which demand increases as income increases and demand decreases as income decreases.}A price floor is a legal barrier that holds a price {Ans: above the equilibrium price. It is called a floor because it sets the lowest legal price that can be charged for a good or service. To be effective, a price floor must be above the equilibrium price. Minimum wage laws passed by state and federal governments are one example of a price floor.}What does the demand curve show? {Ans: When this relationship between prices and quantities is graphed, the result is a demand curve.}two components of supply {Ans: a supplier's willingness to produce and ability to produce and sell.}A surplus occurs when the quantity supplied is {Ans: greater than the quantity demanded. Surplus = Quantity supplied (Qs) > Quantity demanded (Qd)}The upward slope of a supply curve means that there is a {Ans: direct (or positive) relationship between price and the quantity supplied}