Topic 1: Introduction to Markets
1. When buyers and sellers interact to exchange goods or services, they participate in a ________.
2. A rise in the price of a product can provide a ________ to producers to increase production.
3. A market does not necessarily require buyers and sellers to meet at a ________ location.
4. The mechanism through which prices help coordinate the decisions of buyers and sellers is called the ________ mechanism.
5. If consumers suddenly reduce their purchases of a product, the resulting fall in sales can ________ producers about changing market conditions.
6. Markets help connect people who want to ________ goods with those who want to sell them.
7. The fundamental economic problem that makes the role of markets important is ________, because resources are limited while wants are numerous.
Topic 2: Demand
8. A consumer’s desire for a product becomes demand when the consumer has both the willingness and the ________ to purchase it.
9. Other things remaining constant, a rise in the price of a good generally causes its quantity demanded to ________.
10. When the price of a product falls and consumers purchase more of it, this represents a movement ________ the same demand curve.
11. A change in income, tastes or expectations can cause the entire demand curve to ________.
12. If consumers expect the price of a product to increase next month, present demand for that product may ________.
13. The graphical representation showing the relationship between price and quantity demanded is called the ________ curve.
14. A situation in which consumers want a product but do not have the purchasing power to buy it represents a ________ rather than effective demand.
Topic 3: Supply
15. The quantity of a good that producers are willing and able to offer for sale at different prices is called ________.
16. Other things remaining unchanged, an increase in the price of a good generally encourages producers to ________ the quantity supplied.
17. A fall in the cost of raw materials can shift the supply curve to the ________.
18. A technological improvement that reduces production costs can increase the ________ of a product.
19. When the price of the good itself changes and other factors remain unchanged, there is generally a movement ________ the supply curve.
20. If producers expect much higher prices in the future, they may ________ some goods from the present market.
21. A graphical representation of the relationship between price and quantity supplied is called the ________ curve.
Topic 4: Market Equilibrium
22. The price at which quantity demanded equals quantity supplied is called the ________ price.
23. When quantity demanded is greater than quantity supplied at the prevailing price, the market experiences a ________.
24. If demand increases while supply remains unchanged, the equilibrium price will generally ________.
25. If supply increases while demand remains unchanged, the equilibrium quantity will generally ________.
26. The point at which the demand and supply curves intersect represents market ________.
27. When the market price is above equilibrium, quantity supplied may exceed quantity demanded, creating a ________.
28. Changes in demand or supply can cause the market to move from one equilibrium to another, so equilibrium is not necessarily ________.
Topic 5: Surplus and Shortage
29. When producers offer more goods for sale than consumers want to purchase at the prevailing price, a ________ occurs.
30. When quantity demanded exceeds quantity supplied, the market experiences a ________.
31. A shortage can create ________ pressure on prices when sellers are free to adjust them.
32. A surplus generally creates ________ pressure on prices because sellers have unsold goods.
33. A shortage means that consumers want to purchase more than producers are willing to ________ at the prevailing price.
34. If a market has a surplus, sellers may reduce prices to make their products more ________ to buyers.
35. Surplus and shortage indicate that the prevailing price may not be ________ the quantities buyers want to purchase and sellers want to sell.
Topic 6: Price Controls and Black Markets
36. A legally imposed maximum price that sellers can charge is called a price ________.
37. A price ceiling becomes effective or binding when it is set ________ the equilibrium price.
38. A binding price ceiling can result in excess ________ because consumers want more than producers supply.
39. When legal prices are kept below the level that balances demand and supply, some buyers may seek goods through ________ markets.
40. The buying and selling of goods through unofficial channels in violation of price regulations is commonly associated with a ________ market.
41. A price ceiling set above the equilibrium price is generally ________ because it does not restrict the market price.
42. A government may impose a price ceiling on an essential good with the aim of making it more ________ for consumers.
Topic 7: Market Failures
43. A situation in which a free market does not produce an efficient or socially desirable outcome is called market ________.
44. Pollution caused by production that harms people outside the transaction is an example of a negative ________.
45. When one participant in a transaction has more relevant information than another, the situation is known as information ________.
46. A benefit or cost affecting people who are not directly involved in a market transaction is called an ________.
47. Roads, street lighting and certain forms of national defence are examples often used to explain ________ goods.
48. If a factory does not bear the full cost of pollution it creates, the market price may fail to reflect the true ________ cost to society.
49. Government intervention may sometimes be considered when markets fail to provide sufficient public ________.
Topic 8: Types of Goods and Their Effect on Demand
50. Goods that people consider essential for basic living are generally called ________.
51. Goods whose consumption may increase substantially as income rises are often described as ________ goods.
52. Fresh milk and many fresh vegetables are examples of ________ goods because they can lose quality over time.
53. If a household’s income rises and it purchases more expensive holidays, demand for such ________ may increase.
54. A product that consumers can easily reduce their consumption of when its price rises is likely to have more ________ demand than a basic necessity.
55. Goods such as grains that can generally be stored for longer periods are described as ________ goods.
56. When consumers expect a perishable product to become unavailable soon, their present demand for it may ________.
Topic 9: Expectations and Prices
57. Expectations about future prices can influence consumers’ ________ demand.
58. If consumers expect a product to become more expensive soon, they may choose to buy ________ of it today.
59. If buyers expect a substantial future price fall, they may ________ their present purchases.
60. Producers who expect higher future prices may decide to ________ some of their current stock.
61. Expectations about future shortages can cause consumers to increase their present ________.
62. If people expect their future income to fall, they may become more ________ about present spending.
63. Expectations can affect present market behaviour even though the expected event has not yet ________.
Topic 10: Price as a Market Signal
64. A price increase can signal to producers that a product may be relatively more ________ to produce.
65. A high price can encourage consumers to look for ________ products or reduce their consumption.
66. Prices help communicate information about the relative ________ of goods and resources.
67. When the price of a scarce product rises, it can signal consumers that the product is relatively ________.
68. Producers can use price changes as signals when deciding how to ________ scarce resources among different activities.
69. A fall in price caused by increased supply may signal that producing the product has become relatively less ________.
70. By guiding decisions of both consumers and producers, prices can help coordinate economic ________.
Topic 11: Putting Demand and Supply Together
71. When demand increases while supply remains unchanged, equilibrium price generally ________.
72. When supply decreases while demand remains unchanged, equilibrium price generally ________.
73. An increase in supply, with demand unchanged, generally puts ________ pressure on equilibrium price.
74. If both demand and supply increase, equilibrium quantity will generally ________, while the effect on price depends on the relative changes.
75. If demand decreases while supply remains unchanged, equilibrium quantity generally ________.
76. When both demand and supply decrease, the final effect on equilibrium price depends on the relative ________ of the two changes.
77. The interaction of demand and supply helps determine the market’s equilibrium ________ and quantity.
Topic 12: Real-Life Applications
78. A poor harvest caused by adverse weather can reduce the ________ of agricultural products.
79. During a festival, increased consumer demand for certain goods may put ________ pressure on their prices.
80. If vegetable production increases substantially while demand remains unchanged, vegetable prices may ________.
81. If consumers suddenly stop purchasing a product while producers continue supplying it, a market ________ may develop.
82. When an essential product becomes scarce and prices are allowed to adjust, its price may ________.
83. Seasonal changes can affect both the demand and ________ of various products.
84. Understanding real-life price changes requires examining factors such as demand, supply, expectations and government ________.
Tabular Answer Key
| Q. | Answer | Q. | Answer | Q. | Answer | Q. | Answer |
| 1 | Market | 22 | Equilibrium | 43 | Failure | 64 | Profitable |
| 2 | Signal | 23 | Shortage | 44 | Externality | 65 | Substitute |
| 3 | Physical | 24 | Rise | 45 | Asymmetry | 66 | Scarcity |
| 4 | Price | 25 | Increase | 46 | Externality | 67 | Scarce |
| 5 | Signal | 26 | Equilibrium | 47 | Public | 68 | Allocate |
| 6 | Buy | 27 | Surplus | 48 | Social | 69 | Profitable |
| 7 | Scarcity | 28 | Permanent | 49 | Goods | 70 | Decisions |
| 8 | Ability | 29 | Surplus | 50 | Necessities | 71 | Rises |
| 9 | Fall | 30 | Shortage | 51 | Luxury | 72 | Rises |
| 10 | Along | 31 | Upward | 52 | Perishable | 73 | Downward |
| 11 | Shift | 32 | Downward | 53 | Luxuries | 74 | Increase |
| 12 | Increase | 33 | Supply | 54 | Elastic | 75 | Decrease |
| 13 | Demand | 34 | Attractive | 55 | Non-perishable | 76 | Magnitude |
| 14 | Desire | 35 | Balancing | 56 | Increase | 77 | Price |
| 15 | Supply | 36 | Ceiling | 57 | Current | 78 | Supply |
| 16 | Increase | 37 | Below | 58 | More | 79 | Upward |
| 17 | Right | 38 | Demand | 59 | Reduce | 80 | Fall |
| 18 | Supply | 39 | Unofficial | 60 | Hold back | 81 | Surplus |
| 19 | Along | 40 | Black | 61 | Demand | 82 | Rise |
| 20 | Hold back | 41 | Non-binding | 62 | Cautious | 83 | Supply |
| 21 | Supply | 42 | Affordable | 63 | Occurred | 84 | Intervention |