question
shifters of the supply curve
answer
Technology, input prices, related prices, expectations, sellers.
question
normal goods
answer
Demand for them increases as income increases.
question
inferior goods
answer
Demand for them decreases as income increases.
question
substitutes
answer
As price of a good X increases, demand for product Y increases.
question
complements
answer
As price of good X increases, demand for good Y decreases.
question
change in demand/supply
answer
Shift of curve
question
change in quantity demanded/supplied
answer
Movement along curve
question
market size
answer
Number of consumers. As number of consumers increases, so does demand.
question
expectations (demand)
answer
Presumptions made by consumers. If people expect a price to rise, demand increases. If they expect a price to fall, demand decreases.
question
tastes and preferences
answer
As preferences for a product grow, so does demand.
question
law of demand
answer
As price increases, quantity decreases.
question
law of supply
answer
As price increases, quantity increases.
question
input prices
answer
Something used to make a good or service. As input prices increase, supply decreases, and vice versa.
question
technology
answer
New, more efficient technology increases supply.
question
equilibrium
answer
When quantity supplied = quantity demanded.
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shortage
answer
Quantity demanded is greater than quantity supplied.
question
surplus
answer
Quantity supplied is greater than quantity demanded
question
price controls
answer
Legal restrictions on how high or low a market price can go. Price ceilings and floors.
question
price ceilings
answer
A maximum price that sellers are allowed to charge. Only efficient if it's below equilibrium.
question
price floors
answer
A minimum price buyers are allowed to pay for a good or service. Only efficient if it's above equilibrium.
question
effects of price ceilings
answer
Creates a shortage.
question
effects of price floors
answer
Creates a surplus
question
deadweight loss
answer
The lost associated with transactions that don't occur.
question
consumer surplus
answer
the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it
question
producer surplus
answer
the amount a seller is paid for a good minus the seller's cost of providing it
question
law of diminishing marginal utility
answer
rule stating that the additional satisfaction a consumer gets from purchasing one more unit of a product will lessen with each additional unit purchased
question
supply
answer
the amount of goods producers are willing and able and sell
question
demand
answer
the amount of goods consumers are willing and able to buy
question
import quota
answer
a limit on the amount of a good that can be imported
question
Tariff
answer
A tax on imported goods
question
excise tax
answer
a tax on the production or sale of a good
question
amount imported
answer
Difference between the quantity that consumers are willing and able to buy and the amount produced domestically
question
CS gets smaller
answer
When a tariff is added on imports
question
Total revenue
answer
Price x Quantity
question
Total Tax Revenue
answer
Tax x Q
question
Total Revenue the seller gets after tax
answer
Total Revenue - Total Tax Revenue
question
Tax per unit
answer
vertical distance between supply curves
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