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AP MICROECONOMICS ( FRANTA ) > A1-6 Exam Review > Flashcards

A1-6 Exam Review Flashcards

1
Q

what is demand?

A

the willingness and ability to purchase a good

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2
Q

what is quantity demanded?

A

the amount of a good purchased at a specific rate

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3
Q

what is a demand schedule?

A

a chart that indicates the Qd at various prices

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4
Q

what is the demand curve?

A

a graphical representation of a demand schedule

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5
Q

Define the Law of Demand

A

P↑ Qd ↓ and P↓ Qd ↑

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6
Q

how does a movement along the demand curve occur?

A

when a change in the PRICE of the good happens

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7
Q

how does shift in the demand curve occur?

A

when DEMAND changes even though the price stays the same

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8
Q

what are the 5 demand shift factors?

A
  1. income
  2. consumer preferences
  3. prices of related goods
  4. consumer expectations
  5. number of buyers
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9
Q

what are the 9 supply shift factors?

A
  1. cost of inputs
  2. technology
  3. government taxes
  4. government subsidies
  5. government import restrictions
  6. government regulations
  7. number of sellers
  8. prices of alternatives
  9. expectations of future prices
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10
Q

when the price of inputs (resources) increases, the ___ of the goods that are produced with those inputs decreases

A

cost of inputs; supply

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11
Q

when a supplier sells two goods, good A and good B and the price of good A increase, the ____ of good B decreases.

A

prices of production alternatives; supply

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12
Q

when the number of buyers changes, people will buy more or less of goods in that area even though the price didn’t change.

A

number of buyers; demand

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13
Q

when producers expect the price of goods to fall in the future, the current goods increase

A

expectations of future prices; supply

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14
Q

when a person’s tastes change they buy more or less of a good even though the price of that goo didn’t change

A

consumer preferences; demand

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15
Q

goods that people buy more of when their income increases and less of when their income decreases.

A

income - normal good; demand

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16
Q

goods that people buy the same amount of when their income increases or decreases.

A

income - neutral; demand

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17
Q

goods that people buy less of when their income increases and more of when their income decreases

A

income- inferior; demand

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18
Q

when there is an advancement in the technology used to produce goods, the supply of those goods will increase

A

technology; supply

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19
Q

when consumers expect something to occur in the future, they will buy more or less of a good been though the price didn’t change

A

consumer expectations; demand

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20
Q

when the government taxes a producer for producing a good, the supply of that good decreases

A

government taxes; supply

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21
Q

when the government initiates a subsidy for the production of a food, the supply of that good increases

A

government subsides; supply

22
Q

when the government regulates the production of a good, the supply of that good decreases

A

government regulation; supply

23
Q

when the government restricts imported goods from a country, the supply of those goods decreases

A

government import restrictions (quota); supply

24
Q

when the price of a substitute increases, people will buy more of the original good

A

prices of related goods - substitutes; demand

25
Q

when the price of a complement increases, people will buy less of the original good

A

prices of related goods - complements; demand

26
Q

when there are more sellers of a particular good, the supply of that good increases

A

number of sellers; supply

27
Q

define inelastic demand

A

when an increase in price results in a small decrease in QD

28
Q

define elastic demand

A

when an increase in price results in a large decrease in QD

29
Q

A= inelastic // B= elastic

  1. no or very few substitutes?
A

A

30
Q

A= inelastic // B= elastic

  1. necessities?
A

A

31
Q

A= inelastic // B= elastic

  1. many substitutes?
A

B

32
Q

A= inelastic // B= elastic

  1. small % of income spent on good?
A

A

33
Q

A= inelastic // B= elastic

  1. luxuries?
A

B

34
Q

A= inelastic // B= elastic

  1. large % of income spent on good?
A

B

35
Q

A= inelastic // B= elastic

  1. a lot of time to adapt to price changes?
A

B

36
Q

A= inelastic // B= elastic

  1. very little time to adapt to price changes?
A

A

37
Q

what is supply?

A

the willingness and ability of a producer to produce and sell a good

38
Q

what is quantity supplied?

A

the amount of a good that is supplied at a certain price

39
Q

what is supply schedule?

A

a chart that indicates the QS at various prices

40
Q

what is supply curve?

A

a graphical representation of a supply schedule

41
Q

what is the law of supply?

A

P↑ Qd ↑ and P↓ Qd ↓

42
Q

an economic situation in which no one would be better off doing something different

A

equilibrium

43
Q

define what “the price where quantity supplied and quantity demanded are equal”

A

equilibrium price

44
Q

how does a society have a shortage?

A

when the quantity demanded is larger than the quantity supplied (below equilibrium)

45
Q

how does a society have a surplus?

A

when the quantity supplied is larger than the quantity demanded (above equilibrium)

46
Q

the difference between the total amount that consumers are willing and able to pay for a good or service and the total amount that they actually do pay

A

consumer surplus

47
Q

the difference between the total amount that producers receive and the minimum amount they are willing to accept for a good.

A

producer surplus

48
Q

a state of the economy in which production represents consumer preference. (MC=MB)

A

allocative efficiency

49
Q

what do price ceilings do?

A

limits on how high a price is charged for a product. MUST be lower than the equilibrium price

50
Q

what do price floors do?

A

limits on how low a price is charged for a product. MUST be higher than the equilibrium price

51
Q

what does it mean when the text says, “loss of economic efficiency that can occur when equilibrium for a good or service is not achieved or is not achievable”?

A

dead-weight loss

52
Q

which way does the supply curve shift when a tax imposed?

A

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AP MICROECONOMICS ( FRANTA ) (5 decks)

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