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Macro/Microeconomics > Ch 3 - Supply and Demand > Flashcards

Ch 3 - Supply and Demand Flashcards

1
Q

factor market

A

any place where factors of production (e.g., land, labor, capital) are bought and sold

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2
Q

product market

A

any place where finished goods and services (products) are bought and sold

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3
Q

opportunity cost

A

the most desired goods or services that are forgone in order to obtain something else

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4
Q

supply

A

the ability and willingness to sell (produce) specific quantities of a good at alternative prices in a given time period, ceteris paribus

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5
Q

demand

A

the ability and willingness to buy specific quantities of a good at alternative prices in a given time period, ceteris paribus

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6
Q

demand schedule

A

a table showing quantities of a good a consumer is willing and able to buy at alternative prices in a given time period, ceteris paribus

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7
Q

demand curve

A

a curve describing the quantities of a good a consumer is willing and able to buy at alternative prices in a given time period, ceteris paribus – slopes downward

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8
Q

law of demand

A

the quantity of a good demanded in a given time period increases as its price falls, ceteris paribus

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9
Q

substitute goods

A

goods that substitute for each other; when the price of good x rises, the demand for good y increases, ceteris paribus

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10
Q

complementary goods

A

goods frequently consumed in combination; when the price of good x rises, the demand for good y falls, ceteris paribus

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11
Q

ceteris paribus

A

the assumption of nothing else changing

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12
Q

demand shift

A

a change in the quantity demanded at any (every) given price

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13
Q

market demand

A

the total quantities of a good or service people are willing and able to buy at alternative prices in a given time period; the sum of individual demands

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14
Q

market supply

A

the total quantities of a good that sellers are willing and able to sell at alternative prices in a given time period; ceteris paribus

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15
Q

law of supply

A

the quantity of a good supplied in a given time period increases as its prices increases; ceteris paribus

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16
Q

equilibrium price

A

the price at which the quantity of a good demanded in a given time period equals the quantity supplied – changes when demand and supply shifts

17
Q

market mechanism

A

the use of market prices and sales to signal desired outputs (or resource allocations) – the invisible hand

18
Q

price floor

A

lower limits set for the price of a good

19
Q

market surplus

A

the amount by which the quantity supplied exceeds the quantity demanded at a given price; excess supply

20
Q

market shortage

A

the amount by which the quantity demanded exceeds the quantity supplied at a given prices; excess demand

21
Q

price ceiling

A

upper limit imposed on the price of a good

22
Q

3 predictable effects of price ceiling

A

increase the quantity demanded; decrease the quantity supplied; create a market shortage

23
Q

6 determinants of market supply

A

technology; taxes and subsidies; factor cost; expectations; other goods; # of sellers

24
Q

5 determinants of market demand

A

tastes; income; other goods; expectations; # of buyers

25
Q

supply curve

A

a curve describing the quantities of a good a producer is wiling and able to sell (produce) at alternative prices in a given time period, ceteris paribus – slopes upward and to the right

26
Q

supply increase

A

(/) rightward shift - price to decrease, GDP to increase

27
Q

demand decrease

A

() leftward shift - price to decrease, GDP to decrease

28
Q

changes in quantity demanded

A

movement along demand curve due to changes in price for the goods

29
Q

changes in demand

A

shifts of demand curve due to changes in determinants of demand which change the relationship between prices and demand

30
Q

supply shift

A

changes in quantity supplied at any given price

31
Q

supply decrease

A

(/) leftward shift - price to increase, GDP to decrease

32
Q

demand increase

A

() rightward shift - price to increase, GDP to increase

Macro/Microeconomics (18 decks)

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