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BUS 630 Economics > 630. Micro. Ch8. > Flashcards

630. Micro. Ch8. Flashcards

1
Q

What is the vertical axis if a demand curvet?

A

Price

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2
Q

A change is price i show as ___ and results in a change in ___.

A

movement along a given demand curve

quantity demanded

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3
Q

Price and Quantity demanded have a ___ relationship.

A

Inverse

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4
Q

A shift in demand curve can occur because:

A

uncontrollable factors: out of company’s control ( inomce, weather, interest rates, prices of substitute and complementary products produce by other companies

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5
Q

Define uncontrollable factor regarding demand curve shifts.

A

out of company’s control

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6
Q

Define controllable factors regarding demand curve shifts

A

something a company controls (advertsigin, warranties, product quality, distribution speed, etc…

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7
Q

A demand increase moves ___. A change in demand moves ___.

A

the demand curve

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8
Q

Supply curves describe the ___ of a group of sellers and tell you ___ at a give price.

A

behavior

how much will be sold

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9
Q

Supply curves slope ___.

A

upward

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10
Q

Quantity refers to moving ___.

A

along the curve

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11
Q

Change in quantity supplied vs. change in supply.

A

A change in price i son the vertical axis of a demand curve graph, a change in price is show as movement along a given supply curve and result in a change in quantity supplied

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12
Q

Shift off the ___ result from changes in sellers’ perceptions and can occur ___.

A

supply

for a multiple of reasons

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13
Q

Reasons for shift in supply curve:

A 
taxes
subsidies
prices of tore goods produce by the seller
resource costs
number of sellers
technological changes
change in expectation of future sales
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14
Q

If the cost of plastic goes up, bottled water supply curve moves ___.

A

to the left.

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15
Q

if the government begins subsidizing production of bottled water, the supply curve shifts ___.

A

to the right.

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16
Q

We characterize the behavior of sellers with a ___.

A

supply curve

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17
Q

Market equilibrium

A

is the price at which the market quantity supplied equals the market quantity demanded

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18
Q

If price is above equilibrium, there will be a ___.

A

surplus

know how to draw a surplus

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19
Q

downward sloping curve

A

demand

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20
Q

upward sloping curve

A

supply

21
Q

where demand intersects price

A

equilibrium

22
Q

If price is above equilibrium

A

surplus / excess supply

if you have extra inventory, downward pressure on price until it reaches equilibrium

23
Q

if price is below equilibrium

A

shortage / excess demand

if you don’t have enough inventory, upward pressure on price until it reaches equilibrium

24
Q

when there is no pressure for the price to rest or fall

A

equilibrium price

because the Q demanded equals the Q supplied (no shortage or surplus)

25
Q

On a table how do you know where equilibrium is?

A

where supply and demand are the same

26
Q

New equilibrium happens when __.

A

there is a shift in the demand or supply curve

27
Q

If demand curve shifts to the right and price stays the same you have a ___.

A

shortage

28
Q

If the question deals with equilibrium, you need ___.

A

both curves

29
Q

for bottled water, if the cost of plastic goes up, then ___.

A

price goes up

supply curve shifts lift

30
Q

if the change only affects sellers, then only the ___ is affected

A

supply curve

31
Q

a decrease in supply and increase in quantity demanded

A

supply curve is shifting left

32
Q

an increase in demand and increase in quantity supplied

A

demand curve is shifted to the right

33
Q

an increase in demand and increase in quantity supplied

A

demand curve is shifted to the right

34
Q

if demand increases and price stays the same

A

you have a shortage

35
Q

upward pressure on prices

A

shortage

36
Q

consumption issue

A

diminishing marginal utility

37
Q

production issue

A

law of diminishing marginal returns

38
Q

demand and supply curves represent the ___ not a ___

A

industry

company

39
Q

3 aspects of a market

A

time
product
geography

40
Q

if income goes up of buyers, the demand curve is ___. Then there is a ___ in demand and an ___ in price.

A

shifted to the right
increase in demand
increase in price

41
Q

if income goes up of buyers, the demand curve is ___. Then there is a ___ in demand and an ___ in price.

A

shifted to the right
increase in demand
increase in price

P up / Q up

42
Q

if technology improves and the price of manufacturing goes down, the supply curve moves ___

A

to the right

P dn / Q up

43
Q

if both supply and demand are shifting, you can’t ___

A

definitively say what is happening to one of the variables unless you have information

44
Q

An uncontrollable factor is something that affects demand that a company ___ control.

A

cannot

45
Q

Suppose there there is an increase in the price of a substitute for bottled water. What happens tho the equilibrium price and quantity of bottled water?

A

Demand shifts right
Pe up
Qe up

since the price of the substitute went up, people want more bottled water and will pay more for it.

46
Q

Suppose there is new tax paid by the producers of bottled water for each bottle sold. Show a new demand/supply curve. What would happen to the equilibrium price and quantity of battled water?

A

Supply curve moves bc change affects supplier.

Supply curve moves left
Price up
Quantity produces dn

higher equilibrium price
lower equilibrium quantity

47
Q

draw a demand curve showing the market for one-day ticket to Disneyland with an initial price of $100 per ticket and initial quantity of 44,000 tickets.

a) If price is lowered to $80, show.
b) if new ride, show

A

a) if price is lowered, Q increases

b) if new ride, demand increases

48
Q

would holding a patent make a product inelastic?

A

yes, because there are no substitutes

BUS 630 Economics (6 decks)

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