Chapter 3: demand and supply basics Flashcards

1
Q

Comparative static analysis

A

Compares and initial equilibrium with a new equilibrium

Difference due to change of one of the things that lie behind demand or supply curve

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Equilibrium price

A

Equilibriates the markert

clears the market

Price at which quantity demanded equals quantity supplied

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Excess demand

A

Quantity supplied excedes quantity demanded at given price

Excerts upward pressure on price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Excess supply

A

Quantity supplied exceeds quantity demanded at given price

Excerts downward pressure on price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What happens at non-equilibrium

A

Short side dominates

What is traded is what suppliers are willing to sell

Lesser of the quantity of demand or supply that is traded

Happens a lot with price ceilings and price floors

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Supply schedules

A

Based on. Primarily cost of production of product in question

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Demand curve

A

Graphical expression of relationship of price and quantity demanded

We assume all exterior variables remain constant

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Supply curve

A

Graphical representation between relationship of price and quantity supplied

We assume all other things are constant

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Substitute goods

A

when a price reduction for a related product reduces the demand for a primary product, it is a substitute for the primary product

when a price rises for a related product increases the demand for a primary product, it is a substitute for the primary product

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Complementary goods

A

when a price reduction for a related product increases the demand for a primary product, it is a complement for the primary product

when a price rises for a related product increases reduces the demand for a primary product, it is a complement for the primary product

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Inferior good

A

Demand decreases due to rising income

Mans want to buy gyuer shit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Normal goods

A

Demand increases when income rises

The gyuer shit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Distribution of income

A

Important determinant of the demand of commodities and services

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Is taste constant

A

Not in evolving world buoooy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Price floor

A

Sets bar above market-clearing price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Quota

A

Right to supply a specific quantity of a good to the market

physical restriction on output

17
Q

Price ceiling

A

Sets bar under market sealing price

18
Q

Whats the main similarity between price floor and price ceiling

A

The quantity actually traded at certain price is less than the supply and demand quantity at the same price

19
Q

The goal of a marketing board

A

To ensure that price floors and quotas can be maintained

20
Q

Market demand

A

Horizontal sum of individual demands

21
Q

market

A

set of arrangements by which buyers and sellers interact in order to exchange goods and services

22
Q

demand

A

quantity buyers wish tu purchase at every conceivable price

23
Q

supply

A

quantity suppliers willing to supply at every conceivable price

24
Q

quantity demanded

A

the exact quantity demanded at a given price

25
quantity supplied
the exact quantity supplied at a given price
26
what might shift demand curve or cause change in demand relationship?
prices of related goods consumer incomes tastes and networks expectations
27
tastes and fashion
when goods or services become popular, the demand expands
28
price expectations
if prices expected to rise in the future, demand expands today
29
change in prices of related goods, incomes, preferences or price expectations will shift the demand cure or cause a move along the demand curve
shift in demand curve
30
change in price results in what?
move along demand curve
31
improvement of technology causes what?
expands the supply
32
effect of input costs
rise in costs contracts supply decrease in costs expands supply
33
price controls
government rules or laws that inhibit the adjustment of price to clear markets
34
law of unintended consequences
policy measures frequently produce impacts thet are unintended, and that uses impacts may undermine the primary goals of the regulation
35
market demand curve sum
horizontal sum of individual consumers demand curves