question
What is a product market? What is an example of something sold in a product market?
answer
Product Market: Where people buy goods and services produced by firms.
Ex: Stores, vending machines
Ex: Stores, vending machines
question
What is a factor market? Example?
answer
Factor Market: Any place that a person buys resources to produce finished goods.
Ex: Home Depot ( nails to make a desk)
Ex: Home Depot ( nails to make a desk)
question
What is a demand schedule?
answer
A list of the quantities of a good that one person will buy at various prices.
question
What is the law of demand?
answer
Principle stating that as the price of a good or service increases, the quantity demanded decreases, and vise versa.
question
What does it mean to "move along the demand curve"?
answer
An increase or decrease in quantity demanded as a result of a change in price.
question
What does it mean for there to be a "shift in demand"?
answer
Sometimes a factor other than price - such as a spike or a drop in the number of customers - causes demand curve to shift to a new position on the graph.
question
Why are some factors that might cause a shift in the demand curve?
answer
Changes in...
-income
-number of consumers
-consumer tastes and preferences
-income
-number of consumers
-consumer tastes and preferences
question
If there is a decrease in demand due to some factor other than price, in which direction does the demand curve shift?
answer
Shifts to the left
question
Why might a business want to know the demand curve for their product?
answer
Because they want to know how much to make of something and how much people are willing to buy at different prices.
question
How does a business determine its profits?
answer
Profit=Revenue-Cost
question
What is a supply schedule?
answer
A graph that shows the relationship between price and the quantity that producers are willing and able to supply.
question
What is the law of supply?
answer
An economic law stating that as the price of a good or service increases, the quantity supplied increases, and vice versa.
question
What does it mean to move along the supply curve?
answer
An increase or decrease in quantity supplied as a result of a change in price.
question
What does it mean for there to be a "shift in supply"?
answer
An increase or decrease in supply as a result of a change in factors other than price; a shift of the supple curve to the left or right.
question
What are some factors that might cause a shift in the supply curve?
answer
Changes in...
-Conditions due to natural disasters
-Technology
-Producer expectations
-Number of producers
-Conditions due to natural disasters
-Technology
-Producer expectations
-Number of producers
question
If there is an increase in supply due to something other than price, in what direction does the curve shift?
answer
To the left
question
What is equilibrium?
answer
The point at which the quantity of a product demanded by consumers in a market equals quantity supplied.
question
At what point in a supply-demand graph are you going to have a surplus? A shortage?
answer
Surplus: Point on graph higher than equilibrium
Shortage: Point on graph lower than equilibrium
Shortage: Point on graph lower than equilibrium
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