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ECON111 > Chapter 3 > Flashcards

Chapter 3 Flashcards

1
Q

What is the term for what a buyer pays?

A

Price

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2
Q

What does the law of demand state?

A

Price increase = Quantity demanded decrease

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3
Q

Is supply the same as quantity supplied?

A

No, they are different.

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4
Q

What does the law of supply state?

A

Quantity supplied increases with price

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5
Q

What does the equilibrium price represent?

A

Plans of consumers and producers agree

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6
Q

What do oil companies do in excess demand?

A

Raise prices

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7
Q

What is the demand shift when the quantity demanded increases at every given price?

A

Rightward shift

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8
Q

What causes a shift in demand?

A

Change in underlying factors

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9
Q

What is the result of a shift in demand?

A

Different quantity demanded at every price.

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10
Q

What happens to the demand curve with an increase in income?

A

Shifts right

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11
Q

Lower costs correspond to?

A

Higher profits

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12
Q

What happens when the cost of production increases?

A

Price must increase

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13
Q

What do price control laws often lead to?

A

Undesirable consequences

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14
Q

What is a price floor?

A

Lowest legal price

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15
Q

What is deadweight loss?

A

Loss in social surplus

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16
Q

What does the supply curve show?

A

Price vs. quantity supplied

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17
Q

What is the basic principle of the demand and supply model?

A

Demand and supply determine price and quantity sold in markets.

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18
Q

What happens to quantity demanded when price rises?

A

Decreases

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19
Q

What does quantity demanded refer to?

A

A specific point on the demand curve

20
Q

What happens to quantity supplied as price rises?

A

Increases

21
Q

What is the demand shift when the quantity demanded decreases at every given price?

A

Leftward shift

22
Q

What is the effect of an increase in income on the demand for a normal good?

A

Increases

23
Q

What leads to a movement along a demand curve?

A

Change in price

24
Q

Higher costs of production lead to?

A

Lower profits

25
Q

What does a shift of supply to the right mean?

A

Higher quantity supplied at all prices

26
Q

What do you obtain by adding the cost of production and desired profit?

A

Price charged

27
Q

What factors change supply?

A

Cost of inputs, natural disasters, technology, government decisions

28
Q

Does a price change shift a demand or supply curve?

A

No

29
Q

What is a price ceiling?

A

Legal maximum price

30
Q

What is the best-known example of a price floor?

A

Minimum wage

31
Q

What are the main factors that determine what, how, and for whom goods are produced?

A

Demand and supply

32
Q

What does a demand schedule show?

A

Quantity demanded at different prices

33
Q

What happens to quantity demanded when price falls?

A

Increases

34
Q

What does the upward slope of the supply curve illustrate?

A

Law of supply

35
Q

What does equilibrium mean?

A

Balance

36
Q

What does a shift in supply indicate?

A

Change in quantity supplied

37
Q

What was the Green Revolution?

A

Breeding improved seeds

38
Q

What factors can affect demand?

A

Income, population, tastes, prices of substitutes/complements, future price expectations

39
Q

What does a demand curve show?

A

Relationship between quantity demanded and price

40
Q

What is the law of demand?

A

Inverse relationship between price and quantity demanded

41
Q

What is price in economics?

A

Amount received per unit

42
Q

What happens to quantity supplied when price increases?

A

Higher quantity supplied

43
Q

What motivates firms in terms of supply?

A

Profits

44
Q

How do government policies affect production costs?

A

Through taxes, regulations, subsidies

45
Q

What is the process to see the net effect of economic events?

A

Combine individual analyses

ECON111 (34 decks)

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