question
Demand
answer
amount of a good consumers are able/willing to purchase
question
general demad function
answer
how Qd related the the product price
question
direct demand function
answer
relationship between Qd and price
question
inverse demand function
answer
max price consumers are willing to pay
question
normal good
answer
increase in income causes an increase in demand for a good
question
Inferior good
answer
increase in price causes a decrease in demand
question
substitute
answer
price increases --> demand increases
question
complement
answer
demand increases --> price decreases
question
law of demand
answer
Qd increases --> price falls and vice versa
question
Change in Qd
answer
caused by change in price (movement along)
question
increase/decrease demand
answer
causes a Shift --> increase in income changes all the price points
question
change in demand
answer
if one or more variable changes in function
question
Qs
answer
amount of good offered at a time
question
general supply function
answer
all 6 variables effect Qs
question
substitute in supply
answer
increase in price and supply of one good and decrease supply in other
question
complement in supply
answer
increase in price of one good causes an increase in supply of both goods
question
supply price
answer
min price needed to produce good
question
equilibrium
answer
P=Q; consumers can buy all at that price and consumers can sell all that that price
question
equilibrium quantity
answer
amount of good available at that price
question
economic value
answer
max price consumers willing to pay for a unit
question
price ceiling
answer
max price gov't allows producers to charge for goods (below equilibrium - shortage)
question
price floor
answer
min price allowed to charge for good (above equilibrium - surplus)
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