Supply and Demand

Card Set Information

Author:
straightupdeme
ID:
2031
Filename:
Supply and Demand
Updated:
2009-12-01 17:08:11
Tags:
Supply Demand
Folders:

Description:
Unit 2 Economy
Show Answers:

Home > Flashcards > Print Preview

The flashcards below were created by user straightupdeme on FreezingBlue Flashcards. What would you like to do?


  1. Market
    any place where people came together to buy and sell goods or services
  2. Demand
    combination of desire, ability, and willingness to buy a product
  3. Demand Schedule
    listing showing the quantity demanded at all possible prices that might prevail in the market at a given time
  4. Demand Curve
    Graph showing the quantity demanded at each and every possible price that might prevail in the market at a given time
  5. Law of Demand
    • when price increases=demand low quantities
    • when price decreases=demand high quantities
  6. Quantity Demanded
    a change in the quantity of the product purchased in response to a change in price

    price changes always causes a change in qd
  7. Shift Change in Demand
    • shifting right= increase in demand
    • shifting left=decrease in demand
  8. Consumer Income
    as income rises consumers can buy more at each and every price
  9. Number of consumers
    more consumers=more demand
  10. Consumer Expectations
    new reports or expected prices changes
  11. Consumer Tastes/Preferences
    advertising, celebrity endorsements, trends can cause these shifts
  12. Substitutes
    competing products that can be used in place of one another
  13. Complements
    products that increase the value of other products
  14. Diminishing Marginal Utility
    the more units of a certain economic product a person acquires, the less eager that person is to buy still more
  15. Elastic Demand
    when a relatively small change in price causes a relatively large change in the quantity demanded
  16. Inelastic Demand
    a given change in price causes a relatively smaller change in the quantity demanded
  17. Supply
    a schedule of quantities that would be offered for sale at all possible prices that could prevail in the market
  18. Supply Schedule
    tells the quantities offered at each and every possible market price
  19. Supply Curve
    shows that greater amounts will be offered for sale at higher prices
  20. Law of Supply
    • when price increases=supply increase
    • when price decreases= supply decreases
  21. Quantity Supplied
    is the change in amount offered for sale in response to a change in price
  22. Shift in Supply Curve
    • shifting right=increases in supply
    • shifting left=decreases in supply
  23. Cost of Inputs
    change in cost of inputs could cause a change in supply
  24. Productivity
    can increase of workers are more motivated or are trained to work more efficiently
  25. Technology
    new technology usually shifts curve to the right
  26. Number of sellers
    when more suppliers enter the market supply increases or vice-verca
  27. Taxes & Subsidies
    • tax on the manufacture or sale of a good=decrease supply
    • subsidy(cash payment to rpoducers)=increase supply
  28. Expectations
    • anticipation of future events can affect supply curve
    • Two Scenarios
    • producers think prices will go up=withhol some of supply (decreases supply)
    • producers think prices will go down=sell fast (increases supply)
  29. Government Regulations
    • increased regulations restrict supply
    • relaxed regulations increase supply
    • tax on the manufacture or sale of a good=decrease supply
  30. Natural Disaster/Crises
    • hurricanes, floods, wildfires decreases supply
    • wars and revolutions can have similar effects
  31. Elastic Supply
    small increase in price leads to larger increase in output
  32. Inelastic Supply
    small increase in price leads to little chane in quantity supplied
  33. Market Equilibrium
    a situation in which prices are relatively stable, and the quantity of goods or services supplied is equal to the quantity demanded
  34. Shortage
    a situation in which the quantity demanded is greater than the quantity suppled at a given price

    prices tend to rise towards equilibrium when they is a shortage

    qd>qs
  35. Surplus
    a situation in which the quantity supplied is greater than the quantity demanded at a given price

    price tends to fall towards equilibrium when there is a surplus

    qd>qs
  36. Prices
    • prices serve as a link between producers & consumers (buyers & sellers)
    • prices help to decide the three basic question all societies must face
    • prices are an effective way of allocated goods & service
  37. Price Floor
    • is the lowest legal price that can be paid for a good or service
    • i.e: minimum wage
    • usually results in surplus
  38. Price Ceiling
    • is the maximum legal price that can be charged
    • i.e: NYC rent
    • usually results in shortage

What would you like to do?

Home > Flashcards > Print Preview