Econ Unit 2 review

Determinant: Based on prediction of future prices, supply will be affected

Can be overcome by lowering prices or holding back supply until demand increases

Determinant: Supply will change based on worker experience, such as job satisfaction

In a surplus, what will happen to prices?

Minimum wage is an example of a

To fix with a shortage, a government might decide everyone's fair share

Determinant: A price change in a product that goes with another product will affect demand

Overhead; the price a business incurs even if the plant is idle and output is zero

Rent control is an example of a

Determinant: Based on government rulings or mandates, supply will change

Qd < Qs

When prices go up, demand goes down proprortionally

The monetary value of a product as established by supply and demand

The maximum legal price that can be charged for a product

A change in price makes consumers feel richer or poorer

Qd > Qs

A want; if prices rise a little, demand will drop a lot

Determinant: Can increase, but also decrease supply if it doesn't work properly

A need; if price rises a lot, demand will drop only a little

Which of the following is NOT a problem with a ration system?

Law of supply: When prices are high, supply will be

Determinant: The amount an individual makes affects the demand curve

Determinant: The change in price of a similar product affects the demand for another product (Coke & Pepsi)

Can purchase be delayed; How much income does purchase take; Are there adequate substitutes

The satisfaction of using/acquiring one more unit of a product

Number of units sold x Price

Determinant: If the government gives financial aid to a firm, supply will increase

How quickly can the supplier adjust to changes in price determines

In a shortage, what will happen to prices?

May contribute to a shortage

Can be overcome by rationing or increasing supply

Determinant: people moving in or out of a market affects the demand curve

Determinant: New businesses opening, or businesses closing, affect the supply curve

The relationship between factors of production & the output of goods/services

Determinant: Future predictions will affect the demand curve

Qd = Qs

Prices are relatively stable and Qd=Qs

Flexible, determined by buyers and sellers, help buyers and sellers to communicate

The extra change due to adding one more worker (cooks, drywallers)

When price goes up, demand goes down proportionally

Determinant: a change in any item that goes into production will lead to a change in supply

The total output a business needs to sell in order to cover its total costs

A change in quantity demanded due to the change in the relative price of a product

The lowest legal price that can be paid for a good or service

May contribute to a surplus

Determinant: fads and popular opinion

Law of demand: When prices are high, demand will be