Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

2-Economics- Micro > 1.2- Price Determination In A Competitive Market > Flashcards

1.2- Price Determination In A Competitive Market Flashcards

1
Q

Demand

A

-amount of a good/service that an individual is willing and able to buy at a given price over a given period of time

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Demand curve

A

-price against quantity demanded
-goes down

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Extension

A

-fall in price causes a movement along the curve- going along

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Contraction

A

-movement going back up curve

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What causes movements

A

Only a change in the price of the good

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Factors affecting demand

A

(Pirates CS)
Population
Income
Real interest rates
Advertising
Tastes/trends
Economic conditions
Substitutes

Complementary goods(prices)
Substitute goods(prices

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Complementary goods

A

-goods purchased with a product
Eg. Petrol for a car

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Substitute goods

A

-replacement product
-eg. Apple vs samsung phones

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

If an increase in demand- curve…

A

Shifts right

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Decrease in demand curve…

A

Curve shift left

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Consumer surplus

A

-difference between what someone is willing to pay and actual market price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Supply

A

Amount of goods/services a producer is willing and able to offer for sale at a given price in a given period of time

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Supply curve

A

-higher the price/greater the quantity suppplied
-positive relationship
Curve goes up

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Factors affecting supply

A

Pintswc

Productivuty
Indirect taxes
Number of firms
Technology
Subsidies-short term
Weather-favourable conditions mean increase agricultural products
Cost of production

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Producer surplus

A

The difference between what a producer is willing to supply at and the actual market price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Equilibrium price

A

-price at which the quantty demanded is equal to the quanity supplied
-price where the market clears, no tendancy for change at this price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Excess demand

A

-when prices are low
-more demand than supply

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Excess supply

A

-when price high
-more supply than demand

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

How to go through supply and demand q

A

-shift of curves
-affect demand or supply
-left or right
-what is the magnitude
-any movements on other curve

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Interrelated markets

A

-events in one market can affect price in another market if they are interrelated

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

When drawing interrelated market graphs

A

Draw graph changed first first

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Derived demand

A

-good needed for production or consumption of another good
-eg. Wheat needed for wheatabix

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Joint demand

A

-demand for one product is directly and positively related to market demand for a related goods/service
-complementary goods
-eg. Fish and chips

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Competitive demand

A

-other services/products available that compete
consumer can choose
-substitutes
-samsung and apple phones
-as price of one increases, the demand for other increases

25
Composite demand
-increase in demand for one good will affect the supply left to make the other good -good has 2 or more distinct uses -eg. Wood for tables and chairs
26
Joint supply
-occurs when increase in supply necessarily increases supply of other -eg. Beef and leather
27
PES
-price elasticity of supply -measures the proportionate responsiveness of suply to the change in price -positive- as direct relationship between price and supply %change in supply/%change price (swans/plankton)
28
Elastic PES
Touch y axis
29
Inelastic pes
Touch x axis
30
Unitary pes
Through the origin =1
31
Perfectly inelastic
Vertical line from x axis
32
Perfectly inelastic
=0 -factors operating at max capacity -in short term- fixed at no. Seats at football stadium -one off- art -horizontal line from y axis
33
Factors affecting pes (list)
Time period Existance of spare capacity Ease of storing supply Length of production period
34
Time period- how affect pes
Shorter tiem period- more diff for firms to shift from making one product to another
35
Existance of spare capacity- affecting pes
Increase capacity in industry, easier should be to increase output if price increases -supply more elastic
36
Ease of storing stock-how affect pes
-if easier to store- price increase, firms sell stocks so supply more elastic
37
Length of production period- affect pe
Quicker good to produce- easier to reproduce at a change in price
38
Short term supply
-increase in price, increase profts to be made -increased incentive for firms to increase output -firms increase output, hiring mpre variable factors of production eg. Labour -more elastic than market supply period
39
Long run supply
-if firms increase demand for long lasting, may increase q&q factors of production by employing more capital and labour -more elastic than short run
40
Market supply period
-situation facing firms following a switch in unexpected rightward shift of demand -firms cannot immediately increase output -supply increasingly inelastic- price increasingly eliminate excess demand
41
Cross elasticity of demand
Measures the proportionate responsiveness of demand for good x to a change in price for good y -shows relationship between 2 goods %change demand x/%change price y
42
Complementary goods- ced
Ced negative -joint demand -fish and chips
43
Substitute- ced
Competitive demand Ced positive- postitutes -coke and pepsi
44
Ced=0
No relationshoip Verticle line x axis No change in demand in x for change in price in y
45
Income elasticity of demand
Measures the proportionate responsiveness of demand to a change in income Shows types of goods %change demand/%change income
46
Normal goods
Positive yed As y increases so does demand -eg clothes
47
Inferior good
Negative ued Tesco own brand coje As y increases, d decreases
48
Luxury goods
Yed over +1
49
Everyday goods
+0-1 YED
50
What would result in an increase in equilibrium price
Demand is perfectly elastic and labour costs rise
51
What is a positive statement
Able to be tested
52
The income elasticity of demand for bus travel is -1.5 meaning that
The bus travel is an inferior good
53
What would an increase in pirce of butter be caused by Shift left supply and demand
A sucessful advertising campaign for a butter substitute and a tax on butter
54
Effective demand
The desire for a good or service backed by an ability to pay
55
Condition of demand
A determinant of demand other than price, that fixes the position of demand curve Factors which affect demand
56
Veblen goods
Goods of exclusive or ostenetatious consumption Eg ferrari Reassuringly expensive
57
Market disequilibrium
A situation in which opposing forces are out of balance Planned demand < planned supply , price falls Planned demand > planned supply - prices rise
58
Market equilibrium
Planned demand = planned supply Price does not change

2-Economics- Micro (14 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions