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History of Econ. Multiple Choice > 4. Market Forces/ Supply & Demand > Flashcards

4. Market Forces/ Supply & Demand Flashcards

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1
Q

supply & demand

A

determine prices in a market and how prices, in turn, allocate the economy’s scarce resources

refer to the behavior of people as they interact with one another in markets

Mankiw, N. (2023). Principles of Economics (second edition, 62-89). Macmillan Learning Inc.

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2
Q

market

A

a group of buyers and sellers of a particular good or service

Mankiw, N. (2023). Principles of Economics (second edition, 62-89). Macmillan Learning Inc.

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3
Q

competitive market

A

a market in which there are many buyers and sellers so that each has a negligible impact on the market price

Mankiw, N. (2023). Principles of Economics (second edition, 62-89). Macmillan Learning Inc.

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4
Q

quantity demand

A

the amount of a good that buyers are willing and able to purchase

Mankiw, N. (2023). Principles of Economics (second edition, 62-89). Macmillan Learning Inc.

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5
Q

law of demand

A

the claim that other things equal, the quantity demanded of a good falls when the price of the good rises

Mankiw, N. (2023). Principles of Economics (second edition, 62-89). Macmillan Learning Inc.

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6
Q

normal good

A

a good for which, other things equal, an increase in income leads to an increase in demand

Mankiw, N. (2023). Principles of Economics (second edition, 62-89). Macmillan Learning Inc.

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7
Q

inferior good

A

a good for which, other things equal, an increase in income leads to a decrease in demand

Mankiw, N. (2023). Principles of Economics (second edition, 62-89). Macmillan Learning Inc.

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8
Q

substitutes

A

2 goods for which an increase in the price of 1 leads to an increase in the demand for the other

Mankiw, N. (2023). Principles of Economics (second edition, 62-89). Macmillan Learning Inc.

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9
Q

complements

A

2 goods for which an increase in the price of 1 lead to a decrease in the demand for another

Mankiw, N. (2023). Principles of Economics (second edition, 62-89). Macmillan Learning Inc.

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10
Q

demand schedule

A

a table that shows the relationship between the price of a good and the quantity demanded

page 69

Mankiw, N. (2023). Principles of Economics (second edition, 62-89). Macmillan Learning Inc.

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11
Q

demand curve

A

a graph of the relationship between the price of a good and the quantity demanded

Mankiw, N. (2023). Principles of Economics (second edition, 62-89). Macmillan Learning Inc.

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12
Q

ceteris paribus

A

Latin- “other things being equal,” to signify that all the relevant variables, except those being studied at the moment, are held constant

page 70

Mankiw, N. (2023). Principles of Economics (second edition, 62-89). Macmillan Learning Inc.

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13
Q

shifts in the demand curve versus movements along the demand curve

A

shifts = changes in quantity
movement = changes in price

page 74

Mankiw, N. (2023). Principles of Economics (second edition, 62-89). Macmillan Learning Inc.

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14
Q

shifts in the demand curve

A

RIGHT: any change that increases the quantity demanded at a given price shifts the demand curve to the right

LEFT: any change that decreases the quantity buyers wish to purchase at a given price shifts the demand curve to the left

page 72

Mankiw, N. (2023). Principles of Economics (second edition, 62-89). Macmillan Learning Inc.

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15
Q

demand curve

A

shows what happens to the quantity demanded of a good when its price varies, holding constant all other determinants of quality demanded.

when one of these other determinants changes, the demand curve shifts, left

Mankiw, N. (2023). Principles of Economics (second edition, 62-89). Macmillan Learning Inc.

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16
Q

movement along a demand curve

A

Bc price is on the verticle axis when we graph a demand curve, a change in price does not shift the curve but represents a movement along it

Mankiw, N. (2023). Principles of Economics (second edition, 62-89). Macmillan Learning Inc.

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17
Q

quantity supplied

A

the amount of a good that sellers are willing and able to sell

Mankiw, N. (2023). Principles of Economics (second edition, 62-89). Macmillan Learning Inc.

18
Q

law of supply

A

other things equal, the quantity supplied of a good rises when the price of the good rises

Mankiw, N. (2023). Principles of Economics (second edition, 62-89). Macmillan Learning Inc.

19
Q

what determines the quantity an individual supplies?

A
  1. price
  2. input price
  3. technology
  4. expectations

Mankiw, N. (2023). Principles of Economics (second edition, 62-89). Macmillan Learning Inc.

20
Q

supply schedule

A

shows the relationship between the price of a good and the quantity supplied

Mankiw, N. (2023). Principles of Economics (second edition, 62-89). Macmillan Learning Inc.

21
Q

supply curve

A

relationship between the price of a good and the quantity supplied

page 76

Mankiw, N. (2023). Principles of Economics (second edition, 62-89). Macmillan Learning Inc.

22
Q

shifts in the supply curve

A

RIGHT, any change that raises quantity supplied at every priceshifts the supply curve to the right

LEFT, any change that reduces the quantity supplied at every price shifts the supply curve to the left

page 78

Mankiw, N. (2023). Principles of Economics (second edition, 62-89). Macmillan Learning Inc.

23
Q

individual & market supply schedules

A

the quantity supplied in a market is the sum of the quantities supplied by all the sellers

Mankiw, N. (2023). Principles of Economics (second edition, 62-89). Macmillan Learning Inc.

24
Q

market supply as the sum of individual supplies

A

is found by adding horizontally the individual supply curves

page 79

Mankiw, N. (2023). Principles of Economics (second edition, 62-89). Macmillan Learning Inc.

25
Q

equilibrium

A

when supply and demand have been brought into balance

Mankiw, N. (2023). Principles of Economics (second edition, 62-89). Macmillan Learning Inc.

26
Q

equilibrium price

A

the price that balances supply and demand

Mankiw, N. (2023). Principles of Economics (second edition, 62-89). Macmillan Learning Inc.

27
Q

equilibrium quantity

A

the quantity supplied and the quantity demanded when the price has adjusted to balance supply and demand

Mankiw, N. (2023). Principles of Economics (second edition, 62-89). Macmillan Learning Inc.

28
Q

the equilibrium of supply and demand

A

is found where the supply and demand curves intersect

page 80

Mankiw, N. (2023). Principles of Economics (second edition, 62-89). Macmillan Learning Inc.

29
Q

equilibrium price

A

aka. market-clearing price

Mankiw, N. (2023). Principles of Economics (second edition, 62-89). Macmillan Learning Inc.

30
Q

equilibrium price

A

the price at which, the quantity of the goods buyers are willing and able to buy exactly balances the quantity that sellers are willing and able to sell

Mankiw, N. (2023). Principles of Economics (second edition, 62-89). Macmillan Learning Inc.

31
Q

surplus

A

quantity supplied is greater than quantity demanded

Mankiw, N. (2023). Principles of Economics (second edition, 62-89). Macmillan Learning Inc.

32
Q

shortage

A

quantity demanded is greater than quantity supplied

Mankiw, N. (2023). Principles of Economics (second edition, 62-89). Macmillan Learning Inc.

33
Q

law of supply and demand

A

the claim that the price of any goo adjusts to bring the supply and demand for that good into balance

Mankiw, N. (2023). Principles of Economics (second edition, 62-89). Macmillan Learning Inc.

34
Q

3 steps to analyzing changes in equilibrium

A
  1. decide whether the event shifts the supply curve or demand curve, or both
  2. decide which direction the curve shifts
  3. use the supply-and-demand diagram to see how the shift changes the equilibrium

Mankiw, N. (2023). Principles of Economics (second edition, 62-89). Macmillan Learning Inc.

35
Q

how an increase in demand affects the equilibrium

A

page 84 w- graph

Mankiw, N. (2023). Principles of Economics (second edition, 62-89). Macmillan Learning Inc.

36
Q

how a decrease in supply affects the equilibrium

A

page 85, w-graph

Mankiw, N. (2023). Principles of Economics (second edition, 62-89). Macmillan Learning Inc.

37
Q

a shift in both supply & demand

A

page 86, w-graph

Mankiw, N. (2023). Principles of Economics (second edition, 62-89). Macmillan Learning Inc.

38
Q

what happens to price & quantity when supply or demand shifts?

A

page 87, table 4-8

Mankiw, N. (2023). Principles of Economics (second edition, 62-89). Macmillan Learning Inc.

39
Q

how prices allocate resources

A

page 88, it’s a nice read : )

Mankiw, N. (2023). Principles of Economics (second edition, 62-89). Macmillan Learning Inc.

40
Q

summary
review ?’s

A

page 89
page 90

Mankiw, N. (2023). Principles of Economics (second edition, 62-89). Macmillan Learning Inc.

History of Econ. Multiple Choice (4 decks)

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