Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
72 Cards in this Set
- Front
- Back
desire to own something and ability to pay for it |
Demand |
|
says when a good's price is lower, consumers will buy more of it |
law of demand |
|
when consumer reacts to an increase in price of a good & replaces it with another good |
substitution effect |
|
change in consumption that results when a price increase causes a real income to decrease |
income effect |
|
table that lists quantity of a good that a person will buy @ diff prices |
demand schedule |
|
shows quantities demanded @ various prices by all consumers in the market |
market demand schedule |
|
graphic representation of a demand scedule |
demand curve |
|
latin phrase "all other things held constant" |
Ceteris Paribus |
|
factors that lead to the shift of demand |
Non-Price Determinants |
|
goods that concumers demand more of when their income increases |
normal good |
|
buy in smaller quanitities or not at all |
inferior good |
|
statisitcal characteristics of populations |
demographics |
|
2 goods bought and used otgether |
complemts |
|
goods used in place of another |
substitute goods |
|
how drastically buyers increase or decrease demand bc of price |
elasticity of demand |
|
unresponsive to a change in price |
inelastic |
|
responsive to a change in price |
elastic |
|
If the elasticity is 1 |
unitary elastic |
|
how much $ company recieves by selling its goods |
revenue |
|
amount of good or service that is availiable |
supply |
|
producers offer more of a good or service as its price increase & less as its price falls |
law of supply |
|
how much of a good a producer is willing to sell |
quantity supplied |
|
shows relationship between price and quantity supplied for a specific good or service |
supply schedule |
|
factors that can change |
variables |
|
shows relationship between prices & total quantity supplied by ALL firms in a particular market |
market supply scheudle |
|
graphic representation of a supply schedule, horizontal axis measure quantity of good suppled |
supply curve |
|
graph of quantity supplied of a good by all suppliers @ various prices |
market supply curve |
|
measure of the way quantity supplied reacts to a change in price |
elasticity of supply |
|
change in output from hiring one more worker |
marginal product of labor |
|
level of production in which marginal product of labor increases as the number of workers increases |
increasing marginal returns |
|
firm diminishing marginal returns of labor will produce less and less output for each additional unit of labor |
decreasing marginal returns |
|
workers getting in each others way and disrupt overall output |
negative marginal return |
|
cost that doesnt change |
fixed cost |
|
costs that rise or fall depending on quantity produced |
variable costs |
|
fixed & variable costs added together |
total costs |
|
additional costs of producing one more unit |
marginal costs |
|
additional income from selling one more unit of a good |
marginal revenue |
|
total cost divided by quantity proudced |
average costs |
|
cost of operating the facility |
operating cost |
|
gov payment that supports business or market |
subsidy |
|
tax on production or sale of good |
Excise Tax |
|
gov intervention in a market that affects price, quantity, or quality of a good |
Regulation |
|
point of balance @ which the quantity demanded equals quantity supplied |
Equilibrium |
|
quantity supplied doesn't equal quantity demanded |
disequilibrium |
|
excess demanded is greater than quantity supplied |
shortage |
|
quantity supplied exceeds demanded |
surplus |
|
max price that can legally charged for good or service |
price ceiling |
|
priced ceilings placed on apartment rents |
rent control |
|
minimum price set by gov for a good or service |
price floor |
|
minimum price for employers to play for an hour of labor |
minimum wage |
|
quantity of goods a firm has on hand |
inventory |
|
financial & opportunity costs that consumers pay in searching for a product or service |
Search Costs |
|
sudden shortage of a good... gas wheat |
supply shock |
|
system of allocating scarce goods & services using criteria other than price |
Rationing |
|
conducts business without gov control on price or quantity |
Black Market |
|
direct exchange of one set of goods and services for another |
barter |
|
When a consumer is able and willing to buy a good or service, he or she creates what? |
demand |
|
What are inferior goods? |
Good that falls in demand when an income increases |
|
How is the future price related to current demand? |
If the price is expected to rise then current demand will rise |
|
What does it mean when the demand for a product is inelastic? |
A price increase doesnt have any impact on buying habits |
|
What kind of table lists the quantity of a good that a person will buy at different prices? |
Demand Schedule |
|
What is the basic principle of the law of demand? |
when a goods price is lower ppl will buy more of it |
|
What kind of changes would be expected in the demand of a country that has a growing population? |
a rise in demand for shelter |
|
A shift in the demand curve means what? |
change in demand @ every price |
|
When the price rises, what happens to income? |
it buys less |
|
Give an example of lower production costs brought about the use of technology. |
use of email to replace slower surface mail |
|
What factors influence elasticity and inelasticity of demand? |
time, income level, level or price |
|
What are fixed costs and examples? |
costs that dont change... rent, insurance, taxes |
|
Advances in production, such as a new technology, can do what for a good? |
transform it from an expensive luxury to a mid priced good |
|
Equillibrium in a market means what? |
point @ which Supply & demand come together or are equal |
|
LIST all determinants of supply |
1) change in resource cost 2) change in technology 3)change in taxes or subsidies 4) change in # of supplies |
|
LIST all determinants of Demand |
1) change in # of buyers 2) change in buyers taste 3) change in income 4) change in a price or a substiute or complementary good |