Unit 2 Economics Test: Microeconomics

consumers buy more of a good when its price decrease and less when its price increases

increase in something
-halloween affect the demand for candy

decrease in something
-study saying bacon causes cancer affects demand for it

-x: quantity
-y: price

when consumers react to an increase in a good's price by consuming less of that good and more of other goods

the change in consumption resulting from a change in real income

a table that lists the quantity of a good all consumers in a market will buy at each different price

a good that consumers demand more of when their income increases
-amount of pizza

a good that consumers demand less of when their income increases
-used car

two good that are bought and used together
-ski & ski boots

goods used in place of one another
-snowboards vs. skis

a Latin phrase that means "all other things held constant"

a measure of how consumers react to a change in price

-quantity: (Q1-Q2)/Q1
-price: (P1-P2)/P1
-%: Q/P

describes demand that is not very sensitive to a change price
-less than 1

describes a demand that is very sensitive to a change in price
-more than 1

describes a demand whose elasticity is exactly equal to 1

the total amount of money a firm receives by selling goods or services
-calculated by price x quantity sold

tendency of suppliers to offer more of a good at a higher
-P increase then S increases
-P decrease S decreases

a chart that list how much of a good all suppliers will offer at different prices

a measure of the way quantity supplied reacts to a change in price

the change in output from hiring one additional unit of labor

-increasing: a level of production in which the marginal product of labor increases as the number of workers increase
-decrease: a level of production in which the marginal product of labor decreases as the number of workers increase

-when marginal revenue (market price) = marginal cost

a cost that does not change, no matter how much of a good is produced
-rent, manager, equipment, tax

a cost that rises or falls depending on how much is produced
-ingredients/land used to make good, electricity

fixed costs plus variable costs

the cost of producing one more unit of a good
-difference between total cost to next one

total revenue - total cost

the additional income from selling one more unit of a good; sometimes equal to price

the cost of operating a facility site s a store or factory

a government payments that supports a business or market

-increase in supply
-subsidy

-decrease in supply
-excise tax

a tax on the production of sale of a good

government intervention in a market that affects the production of a good

the point at which quantity demanded and quantity supplied are equal

describes any price or quantity not at equilibrium
-when quantity supplies is not equal to quantity demanded in a market

when quantity supplied os more than quantity demanded (surplus)

situation in which quantity supplied is greater than quantity demanded (excess supply)

when quantity demanded is more than quantity supplied (shortage)

situation in which quantity demanded is greater than quantity supplied (excess demand)

the financial and opportunity costs consumers pay when searching for a good or service

a maximum price that can be legally charged for a good or service

a minimum price for a good or service

a price ceiling placed on rent

a minimum price that an employer can pay a worker for an hour of labor

a sudden shortage of a good

a system of allocating scarce goods and services using criteria other than price

a market in which goods are sold illegally

costs of production that affect people who have no control over how much of a good is produced

-causes racial discrimination
-destroys buildings
-keeps from building new units
-more homelessness

(cons of increasing)
-more incentive to replace people with machines
-might cut other employers benefits
-less jobs offered = increase unemployment
-business can't support as many workers = can't afford it
-price goes up = producers will spend more to pay workers = priced will go up
-ment to be an entry starter not a full time career
(pros of increasing)
-more income = people spend more
-afford cost of living
-more equality
-still not a living wage
-stil; involves handwork and skill