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MACRO > chap 3 > Flashcards

chap 3 Flashcards

1
Q

Profit = ?

A

Sales-Costs

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2
Q

Factor Markets?

A

any place where factors of production like land, labor, and capital are exchanged

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3
Q

Product Markets

A

any place where finished goods and services (product( are sold
- think grocery store or something online where you buy stuff

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4
Q

Opportunity Costs

A

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

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5
Q

What is a market?

A

simply refers to a place or situation where an exconomic exchange occurs (buyer and seller interact)

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6
Q

what are the 4 factors of production?

A

land, labor, capital and entrepreneurship.

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7
Q

Supply?

A

ability and willingness to sell (produce) specific quanitites of a good

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8
Q

Demand?

A

ability and willingness to buy specific quantities of a good at alternative prices

  • buy is on demand side
  • a demand exists only if someone is willing and able to pay for the good
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9
Q

Demand Schedule?

A

a table showing the quantities of a good a consumer is willing and able to buy at alternative prices in a given time period
- demand schedule tells us what the consuer is willing and able to buy not necessarily why

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10
Q

Demand Curve

A

a convienent summary of buying intentions

- amount we buy of a good depends on its price

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11
Q

Law of Demand?

A

as the price of a goods falls, people purchase more of it

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12
Q

What are the 5 determinants of market demand?

A

tastes, income, other goods, expectations, and number of buyers

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13
Q

What is TASTE determinant of market demand?

A

(desire for this and other goods)

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14
Q

What is the INCOME determinant of market demand?

A

income (of the consumer)

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15
Q

What is the OTHER GOODS determinant of market demand?

A

other goods (their avaliability and price)

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16
Q

What is the EXPECTATIONS determinant of market demand?

A

expectations (for income, prices, tastes)

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17
Q

What is the NUMBER OF BUYERS determinant of market demand?

A

how many people buy it

18
Q

complement good?

A

what happens to one good can cause change in demand of other good

- if you have milk with cereal and its price triples demand for cereal goe down 
- two goods that work together likes this is called complimentary good
19
Q

Substitute good?

A

price of cerel goes up, so demand for subsitite good goes up

- price of tea goes up, the demand for coffee goes up

20
Q

Ceteris Paribus?

A

assumption of nothing else changing

21
Q

What do demand curves show us?

A

how changes in market prices alter consumer behavior

22
Q

Shift in demand?

A

change in the quanitity demand at any given price

- entire demand curve shifts to the right when income goes up

23
Q

Explain movement vs shifts on a graph

A

movements along ademand curve are a response to price changes for that good

  • shifts of the demand curve occur when the determinants of demand change
  • when tasts, income, other goods, or expectations are altered, the basic relationship between price and quantity demand is changed (shfits)
24
Q

changes in quantity demanded

A

movements along a given demand curve in response to price changes of that good

25
Q

changes in demand

A

shifts of the demand curve due to changes in tastes, income, other goods, or expectations

26
Q

market demand

A

total quanitites of a goods or service people are willing and able to buy at alternative prices in a given time period

27
Q

market supply?

A

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

28
Q

what are the 6 determinants of market supply?

A
  • technology
  • factor costs
  • other goods
  • taxes and subsidies
  • expectations
  • number of sellers
29
Q

Law of supply?

A

quanitity of a good supplied in a given time period increases as its price increases, ceteri paribus

30
Q

market supply is a what?

A

expression of seller’s intentions - an offer to sell- not a statement of actual sales

31
Q

changes in quantity supplied?

A

movements along a given supply curve

32
Q

changes in supply?

A

shifts of the supply curve

33
Q

explain difference between change in supply and quantity supplied?

A

changes in quanitity supplied can be tracked along the supply curve
- change in supply are illustrated by shifts of the supply curve

34
Q

equilibrium price?

A

price at which the wuanitity of a good demanded in a given tie period equals the quantity supplied

35
Q

market mechanism?

A

use of market prices and sales to signal desired outputs (or resource allocations)

36
Q

Price floor?

A

minimum price for their services

37
Q

market surplus

A

amount by which the wuantity supplied exceeds the quantity demanded at a iven price

38
Q

market shortage

A

an excess quantity demanded over quanitity supplied

39
Q

when will there be a market shortage?

A

whenever the market price is set above or below the euqilibirum proce, either a market surplus or a market shortage will occur

40
Q

when will there be a market surplus?

A

when a market surplus, sellers will compete for customers by reducing prices

MACRO (19 decks)

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