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ECON265-Microeconomics > Chapter 3 > Flashcards

Chapter 3 Flashcards

1
Q

Law of demand

A

Inverse relationship of the unit price and the quantity demanded

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2
Q

Change in demand price

A

Change in Quantity demanded = movement

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3
Q

Change in Non-price determinate

A

Change in demand = shift

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4
Q

Non-Price Determinants of Market Demand

A 
Number of buyers
Tastes and Preferences
Income
Expectation of buyers
Prices of related goods
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5
Q

Perfect Substitute

A

Goods that are exactly same in functionality

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6
Q

Perfect Compliments

A

One good that is necessarily reliant on another.

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7
Q

Change in demand

A

increase in Quantity demanded at each possible price level

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8
Q

Law of Supply

A

Direct relationship between price and quantity supplied

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9
Q

Non-price determinants of market supply curve

A 
Number of sellers
Technology
Government intervention
Resource Prices
Expectation of seller
Prices of other goods
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10
Q

Increase or decrease in Supply

A

increase in the Quantity supplied at each possible price level

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11
Q

More Buyers

A

Increase in Demand = Rightward shift

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12
Q

Less Buyers

A

decrease in Demand = Leftward shift

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13
Q

Positive Information

A

Increase in Demand = Rightward shif

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14
Q

Negative Information

A

decrease in Demand = Leftward shift

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15
Q

More income

A

Buy more = Normal Good = Rightward shift

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16
Q

less Income

A

Buy less = Inferior Good = Leftward shift

17
Q

if price will increase

A

demand increases

18
Q

if price will decrease

A

demand decreases

19
Q

More sellers

A

Increase in supply = rightward shift

20
Q

Less sellers

A

Decrease in supply = leftward shift

21
Q

Better technology

A

increase in supply = rightward shift

22
Q

Increase in Resources Price

A

Quantity supplied decreases = leftward shif

23
Q

Tax = Increase in resource price

A

decrease in quantity supplied

24
Q

Subsidies = decrease in resource price

A

increase in quantity supplied

25
Q

Price will increase

A

Increase in Demand

Decrease in supply

26
Q

Price will decrease

A

decrease in Demand

increase in supply

27
Q

Increase price of X = Increase in quantity supplied of X

A

upward movement

28
Q

Increase price of X = decrease in supply Y

A

rightward shift

29
Q

Increase or decrease in Supply

A

increase in the Quantity supplied at each possible price level = rightward shift

30
Q

Market Equilibrium

A

Market clearing price
no shortage or surplus
Quantity Demanded = Quantity Supplied
Intersection of supply and demand curve

31
Q

Surplus

A

P1 > P* = Quantity demanded

32
Q

Shortage

ECON265-Microeconomics (17 decks)

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