Chapter 3 Flashcards
1
Q
Important Ideas from Wealth of Nations
A
- The division of labor is limited by the extent of the market
- The division of labor causes markets
2
Q
Demand curve
A
function that shows the quantity demanded at different prices
3
Q
Quantity Demanded
A
the quantity that buyers are willing to buy at a certain price
4
Q
Consumer Surplus
A
the customers gain from exchange
5
Q
Total Consumer Surplus
A
the area beneath the demand curve and above the price
6
Q
Factors that shift demand
A
Income, Population, Price of Subsitutes, Price of compliments, Expectation, tastes
7
Q
Supply Curve
A
function that shows quantity supplied at different prices
8
Q
Producer Surplus
A
producer’s gain from exchange
9
Q
total producer surplus
A
the area above the supply curve and below the price
