3.2 Shifts in Demand and Supply for Goods and Services Flashcards
What two factors affect demand?
- Income of consumers
2. Producers supply and cost of production
The _______ indicates the effect of one variable on another, keeping all other variables unchanged;
Eliminating the possibility of change in other factors that determine the relationship between two variables.
Ceteris Paribus
Any supply and demand curve is based on the ______+ assumption that all else is held equal
Ceteris Paribus
How can the effect on demand and supply be analyzed if multiple factors are changing at the same time?
Examine the changes one at a time and add up the individual results
What are two reasons consumer buying falls?
HIgher Price
Lower Income
A shift in the demand curve to the right indicates what?
Increased demand means that at every given price, the quantity demanded is higher.
A shift in a _____ captures a pattern for the market as a whole.
Demand Curve
A product who’s demand rises when Income rises and vice versa is called a ______.
Normal Good
A product whos demand falls when income rises is a _____
Inferior Good
3 Factors that cause a shift in demand?
- Change in taste or preference
- Changes in population composition
- Expectations of Future Prices
Goods that enhance the consumption of another are ______
Complements
When a change in some factor other than price causes a different quantity to be demanded at every price
A shift in Demand
taste shift to greater popularity Populate likely to buy rises Income Rises Price of Complement goods falls Future expectations influencing buy
Increases Demand
A ______ means a shift in the quantity ______
Shift in Supply
What are inputs or factors of production?
a combination of labor, materials, and machinery usedto produce a good or service.
