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Economics Ch 7/Sec 1-4 Flashcards | StudBud
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Economics Ch 7/Sec 1-4
Economics Ch 7/Sec 1-4
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Demand/Supply
Flashcards
20 cards
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Questions
20
Answers
1
Law of supply states if the good of the price rises
Quantity of supply rises
Quantity of supply lowers
2
People can't keep buying the same things if their income stays the same is called
quantity relations
substitution effect
real income effect
3
A supply curve shows quantities that producers are willing to supply at each
possible price point
at each availability of food supply
4
A price floor is a
government-set minimum price charged for goods and services
government set maximum price charged for goods and services
5
If the price of one rises in relation to the price of another people will buy the lesser price
Substitution effect
Quantity Demand effect
Law of diminishing demand
6
Law of Demand
the quantity demand & price move in opposite directions
process of freely exchanging goods and services
7
Define demand
a good or service that consumers are able/willing to buy
Ability of any good/service to satisfy owners wants
additional amount of satisfiction
8
The relationship between each possible price point and quantity demanded is
same
inverse
aligned
9
What is the price called that quantity demanded and quantity supplied meet
real income
substitution effect
equilibrium price
10
One Determinants of Demand
Taxes
Change in population
Price of inputs
11
If a price change does not result in a substantial change in quantity demand, then demand is
considered inelastic
considered elastic
12
Another Determinants of Demand
Number of Firms in the industry
Change of income
Technology
13
Four determinants of supply are
Price of inputs, # of firms in the industry,taxes technology
Change in population, income, taste preference, substitutes
14
When prices go above equilibrium price, suppliers produce more than consumers want to purchase
results in large unsold inventory called surpluses
resulting in small inventory causing rations
15
Complements are product that are generally
dismissed as too expensive
Bought and sold together
16
When at the current price the quantity demanded is greater than the quantity supplied
it is called a shortage
it is called a surplus
17
Downward sloping line that shows quantity demanded at each
P2 point
possible price
at each negative graph line
18
A direct relationship means that
an inverse relationship/quantity and price are opposite
that when the prices rise, quantity supply will rise too
19
Law of Diminishing Return is important
to understand what happens w additional product price points
to understand additional employees needed or not needed
20
Term that economists use for satisfaction
Utility
Marginal Fractioning
Reality
