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54 Cards in this Set

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What is Quantity Demand?

It is the amount of a good, service or recourse that people are willing and able to buy during a specified period at a specified price. The quantity demanded is an amount per unit of time. I.e: amount per day or per month.

What is the Law of Demand?

Over things remaining the same. If the price of the good rises, the quantity demanded of that good decreases. If the price of the good falls, the quantity demanded of that good increases.

What is Demand?

it is the relationship between the quantity demanded and the price of a good when all other influences on buying plans remain the same.

What is the Demand Schedule?

It is a list of the quantities demanded at each different price when all the other influences on buying plans remain the same.

What is the Demand Curve?

is a Graph of the relationship between the quantity demanded of a good and its price when all other influences on buying plans remain the same.

What is Market Demand?

Is the sum of the demands of all the buyers in a market. It is a horizontal sum of the demand curves of all buyers in the market.

What is Change in Demand?

is a change in the quantity that people plan to buy when any influence other than the price of the good changes. it means that there is a new demand schedule and a new demand curve.

The main influences on buying plans that change demand are...

Prices of related goods, Expected future prices, Income, Expected future income and credit, Number of buyers, and preferences.

What is a substitute?

a good that can be consumed in place of another good. I.e: Apples and oranges.

What is a Complement?

is a good that is consumed with another good. I.e: Ice cream and chocolate sauce.

A __1__ in the expected __2__ price of a good __3__ the __4__ demand for that good.

Rise


Future


Increases


Current

A __1__ in the expected __2__ price of a good __3__ the current __4__ for that good.

Fall


Future


Decreases


Demand

What is a Normal good?

A good for which the demand increases if income increases and demand decreases if income decreases. (Same)

What is an Inferior good?

A good for which the demand decreases if the income increases and demand increases if income decreases. (opposite)

When do preferences change?

When people become better informed and new good become available.

The __1__ number of buyers in a market the __2__ is the demand for any good

Greater


Larger

When ___1___ change, the __2__ for one item increases and the demand for another item __3___

Preferences


Demand


Decreases

What is the change in Quantity demand?

The change in quantity of a good that people plan to buy that results from a change in the price of the good.

What is the Chane in Demand?

A change in the quantity that people plan to buy when any influence other than the price of the good changes.

What is the Quantity supplied?

The amount of a good, service, or resource that people are willing and able to sell during a specified period at a specified price.

What is the law of Supply?

Other things remain the same,


If the price of a good rises, the quantity supplied of that good increases.


If the price of a good falls, the quantity supplied of that good decreases.

What is Supply?

The relationship between the quantity supplied of a good and the price of the good when all other influences on selling plans remain the same.

What is a Supply Schedule?

A list of the quantities supplied at each different price when all other influences on selling plans remain the same.

What is a Supply Curve?

The graph of the relationship between the quantity supplied and the price of the good when all other influences on selling plans remain the same.

What is market supply?

The sum of the supplies of all sellers in a market. The curve is the horizontal sum of the supply curves of all the sellers in the market.

What is the Change in Supply?

The change in the quantity that suppliers plan to sell when any influence on selling plans other than the price of the good changes. This means that there is a new supply schedule and a new supply curve.

The main influences on selling plans that change supply are

Prices of related goods, prices of resources and other inputs, expected future prices, number of sellers, and productivity.

What is a substitute in Production?

A good that can be produced in place of another good. I.E: A truck and an SUV in production at an auto factory.

What is a Complement in Production?

A good that is produced along with another good. I.e: Cream can be produced along side skim milk in a dairy.

___1___ and ___2___ prices influence the cost of ___3___. And the more it costs to produce a good, the ___4___ is the quantity supplier of that good.

Resource


input


production


smaller

___1___ about ___2___ prices influence ___3___

Expectations


future


supply

___1___ of ___2___ prices of ___3___ also influence supply

Expectations


Future


Resources

The ___1___ the number of sellers in a market, the ___2___ is supply

Greater


Larger

What is Productivity?

The output per unit of input

An ___1___ in productivity ___2___ costs and ___3___ supply. I.e, an advance in technology increases supply

Increase


Lowers


Increases

A ___1___ in productivity ___2___ costs and __3__ supply. For example, a severe hurricane decreases supply.

Decrease


Raises


Decreases

What is change in quantity supplied?

The change in the quantity of a good that suppliers plan to sell that results from a change in the price of the good.

What is change in supply?

A change in the quantity that suppliers plan to sell when any influence on selling plans other than the price of the good changes.

What is the Market equilibrium?

It occurs when the quantity demanded equals the quantity supplied. This means the buyers and sellers plans are consistent.

What is the Equilibrium price?

The price at which the quantity demanded equals the quantity supplied.

What is the Equilibrium quantity?

The quantity bought and sold at the equilibrium price.

What is the law of Market Forces?

When there is a shortage, the price rises. When there is a surplus, the price falls.

Which 3 questions should be asked when predicting price changes?

Does the event change demand or supply?


Does the event increase or decrease demand or supply?


What is the new equilibrium price and quantity and how have they changed?

What happens when the Demand changes?

The supply curve does not shift, but there is a change in the quantity supplied. The equilibrium price and quantity change in the same direction as the change in demand.

What happens when supply changes?

The demand curve does not shift, but there is a change in the quantity demanded. Equilibrium price changes in the same direction as the change in supply. The Equilibrium quantity changes in the opposite direction to the change in supply.

If something effects changes in both supply and demand, which 3 questions should be asked?

Does each event change supply or demand?


Does either event increase or decrease demand or increase or decrease supply?


What are the new Equilibrium price and quantity and how have they changed?

If there is an increase in both demand and supply...

Then this will increase the equilibrium quantity.

The change in the equilibrium price is ambiguous because the..

Increase in demand raises the price.


Increase in supply lowers the price.

If there is a decrease in both demand and supply...

Then this decreases the equilibrium quantity.

The change in the equilibrium price is ambiguous because the...

Decrease in demand lowers the price


Decrease in supply raises the price.

An increase in demand and a decrease in supply will...

Raise the Equilibrium price.

The change in the equilibrium quantity is ambiguous because the...

Increase in demand increases the quantity.


Decrease in supply decreases the quantity.

A decrease in demand and an increase in supply will...

Lower the equilibrium price.

The change in the equilibrium quantity is ambiguous because the...

Decrease in demand decreases the quantity.


Increase in supply increases the quantity.