question
Demand
answer
A schedule or curve that shows the various amounts of a product that consumers will buy at each of a series of possible prices during a specific period.
question
Law of Demand
answer
The principle that, considering all things equal, as price falls, the quantity demanded rises. As price rises, quantity demanded falls.
question
Demand Curve
answer
A curve illustrating the inverse relationship between the price of a product and the quantity of it demanded. (All things equal)
question
Determinants of Demand
answer
Factors other than price that locate the position of a demand curve.
[Consumer's taste, number of consumers in the market, Consumer income, prices of related goods, Expected prices]
[Consumer's taste, number of consumers in the market, Consumer income, prices of related goods, Expected prices]
question
Normal Good (Superior Good)
answer
Good (service) whose consumption rises when income increases, and falls when income decreases.
question
Inferior Good
answer
Good (service) whose consumption declines when income rises, and rises when income decreases.
question
Substitute Good
answer
Good (service) that can be used in place of some other good (service).
question
Complimentary Good
answer
Good (service) that is used in conjunction with some other good (service).
question
Change in Demand
answer
Change in the quantity of demanded of a product at every price. Shift of demand curve to the Right or Left.
question
Tastes
answer
Favorable change in consumer's preferences for a product means more of it will be demanded at each price.
question
Number of Buyers
answer
Increase in the amount of buyers in the market will increase demand for the product
question
Income
answer
Changes in income effect demand differently. which introduces Substitute Goods, Complimentary Goods, Normal Goods, and Inferior Goods.
question
Change in Quantity Demanded
answer
Movement from one point to another one on a fixed demand curve.
question
Supply
answer
Schedule or curve that shows the amounts of a product that producers are willing to make available for sale at each price during a specific period.
question
Law of Supply
answer
The Principle that (all things equal) as price rises, the quantity supplied rises. Price falls quantity supplied falls.
question
Supply Curve
answer
Curve illustrating the direct relationship between the price of a product and the quantity of it supplied (all things equal).
question
Determinants of Supply
answer
Factors other than price that locate the position of the supply curve.
[Resource Prices, Technology, Taxes and subsidies, Prices of other goods, Expected price, Number of sellers in the market.]
[Resource Prices, Technology, Taxes and subsidies, Prices of other goods, Expected price, Number of sellers in the market.]
question
Resource Prices
answer
Price of the resources used in the production process.
question
Technology
answer
Improvements in technology enable firms to produce more units of output while using fewer resources.
question
Taxes and Subsidies
answer
How much you have to give the government to produce a good/service. As well as how much you get from the government for producing good/service.
question
Expected Prices
answer
Changes in expectations about the future price of a product may affect the producers current willingness to supply that product.
question
Number of Sellers
answer
All things equal, the more suppliers in the market, the greater market supply.
question
Change in Supply
answer
Change in the quantity supplied of a product at every price; a shift of the supply curve to the left or right.
question
Change in Quantity Supplied
answer
Movement from one point to another on a fixed supply curve.
question
Equilibrium Price
answer
The price in a competitive market at which the quantity demanded and quantity supplied of a product are equal.
question
Equilibrium Quantity
answer
The Quantity Demanded and Quantity Supplied that occur at the equilibrium price in a competitive market.
question
Surplus
answer
Amount by which the quantity supplied of a product exceeds the quantity demanded at a specific (above equilibrium) price.
question
Shortage
answer
Amount by which the quantity demanded of a product exceeds the quantity supplied at a specific (below equilibrium) price.
question
Price Ceiling
answer
Legally established maximum (below equilibrium) price for a product
question
Price Floor
answer
Legally established minimum (above equilibrium) price for a product
question
Graphically, the market demand curve is:
answer
the horizontal sum of individual demand curves
question
Demand curve shows
answer
Relationship between Price and Quantity Demanded
question
Economists use the term 'Demand' to refer to:
answer
Schedule of various combinations of market prices and amounts demanded.
question
If the Price of K declines, the demand curve for close-substitute J will:
answer
Shift to the Right
question
Increasing marginal cost of production explains:
answer
Why the supply curve is up sloping.
question
Income and substitution effects account for:
answer
Downward sloping demand curve.
question
Graphically, the market demand curve is:
answer
the horizontal sum of individual demand curves
question
Graphically, the market demand curve is:
answer
...
question
Change in Quantity Supplied
answer
...
question
The income effect is best described as ________increasing the purchasing power of income enabling consumers to buy ____ of a product and vice versa
answer
lower prices, more
question
Producer expectations of future prices are a determinant of:
answer
supply
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
