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25 Cards in this Set
- Front
- Back
Resource Price (a cost to the business) ↓; Opportunity Costs ↓; Profits ↑; Qx Supplied ↑
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Example: price of fertilizer drops; opportunity costs of producing the good drops; profit higher; corn production increases
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Resource Price (a cost to the business) ↑; Opportunity Costs ↑; Profits ↓; Qx Supplied ↓
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Example: a new wage contract boosts wages; opportunity costs of producing the good increases; less profit; less incentive
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Technology
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production methods used to combine, resources to produce goods and services.
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Technological advance
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increased productivity of resources, or, get more output per unit of input
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Advantages in Technological advances
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efficiencies are gained'; Opportunity Costs are reduced; more profit; more will be produced.
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Natural disasters can reduce Supply
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Hurricanes, drought, early freezes,
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Weather conditions can facilitate Supply
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Bumper crops, tourism increases
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Political events, can disrupt Supply
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Oil from the Mid-East, Cuban, cigars
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Political events can encourage Supply
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Deregulation of Trucking, Airlines
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Imposition raises Opportunity Cost of production; less Supply
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10% luxury tax on autos
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Reduction lowers Opportunity Cost of production; more Supply
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Reduced Capital Gains
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Market Supply is the sum of the Individual Supply Curves:
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a. One company selling Stereos in Trumbull County Qx = Qmarket
b. Two companies selling Stereos in Trumbull County Qx + Qy = Qmarket c. Three 'companies selling Stereos 'in Trumbull County Qx + Qy + Qz = Qmarket |
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Substitutes
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Py↑ Qx↑; Py↓Qx↓ Margarine and Butter, IBM & Compaq computers
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Complements
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Py↓ Qx↑; Py↑ Qx↓ Greens fees & golf balls, computers & floppy discs
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Normal Good
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Income↑ Qx↑ Income ↓ Qx↓ Travel, Appliances
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Inferior Good
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Income↑ Qx↓ Income ↓ Qx↑ Macaroni & cheese
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Expect a price increase
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Qx↑ in present time period "Buy now, beat the price increase"
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Expect a price decrease
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Qx↓ in present time period After-Christmas Sales
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Expect Income to rise
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Qx↑ in present time period College Seniors
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Expect Income to fall
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Qx↓ in present time period Expect being laid off
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Expect product to be available soon:
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CD players, new cars
Qx↓ in present time period |
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Expect product won't be available in future
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Discontinued brands, oil in 1974
Qx↑ in present time period |
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Product is "fashionable"
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Qx↑ $100 running shoes, NFL jackets
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Product is "unfashionable”
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Qx↓ Leisure Suits, 8-track tapes
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Market Demand is the sum of the Individual Demand Curves:
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a. Sell Stereos only in Trumbull County Qx Trumbull
b. Sell Stereos in Trumbull & Mahoning Counties Qx Trumbull + Qx Mahoning c. Sell Stereos in Trumbull, Mahoning & Stark Qx Trumbull + Qx Mahoning + Qx Stark |