CHAPTER 3 MIDTERM Flashcards
WHAT ARE THE 5 LARGEST INFLUENCERS IN DEMAND FLUXIATION
- CHANGES IN THE WEATHER
- POPULATION
- CONSUMERS’ TASTES
- PRICES OF OTHER GOODS
- CONSUMERS INCOME
CPCPC
Quantity demanded refers to the quantity of widgets demanded
______. ”The quantity demanded of widgets is 1000 units” is not meaningful unless we know the
_____ over which the 1000 units are demanded. Quantity demanded is a(n)
______
.
a) per period of time
b) time period
c) flow variable
WHAT DOES
ceteris paribus TRANSLATE TO?
B) WHAT DOES IT MEAN IN THE CONTEXT OF ECONOMICS?
.
A)”other things being equal”
b) When we want to study the effects of changes in one variable at a time, we
hold all other variables constant
what is stock variable vs flow variable
stock variable has meaning at a POINT IN TIME: usually a given date associated with a good
Flow variable is just a quantity With little other information, MAYBE A PER MONTH/PER HOUR
THEY CANNOT BE ADDED TOGETHER WITHOUT SPECIFYING A PEROID OF TIME WHERE THE FLOW PERSISTS
INCREASE DEMAND = D SHIFT TO RIGHT
WHAT IS DEMAND VS QUANTITY DEMANDED
DEMAND: the entire demand curve
QUANTITY DEMANDED: a particular point on the demand curve
WHAT ACTIONS CAN RESULT IN A CHANGE OF QUANTITY DEMANDED
- SHIFT IN DEMAND CURVE WITH CONSTANT PRICE
- MOVEMENT ALONG A GIVEN DEMAND CURVE DUE TO A CHANGE IN THE PRICE,
- BOTH AT THE SAME TIME
HOW DOES AN INCREASE IN DMEAND AFFECT THE DEMAND CURVE
SHIFT TO THE RIGHT, QUANTITY DEMANDED IS HIGHER AT EACH PRICE
WHEN A PRICE RISES FOR A NORMAL GOOD, WHAT HAPPENS TO THE INFERIOR GOOD
DEMAND CURVE SHIFTS TO THE RIGHT (INCREASE DEMAND)
Quantity demanded is the
TOTAL AMOUNT OF A GOOD THAT CONSUMERS WISH TO PURCHASE AT A GIVEN PRUCE DURING A GIVEN TIME
A demand schedule is
A TABLE SHOWING THE RELATIONSHIP BETWEEN QUANTITY DEMANDED AND THE PRICE OF A COMMODITY, OTHER THINGS BEING EQUAL
Quantity Supplied is?
the amount of good or service producers want to sell in some time period. FLOW VARIABLE
what is the term for the amount that producers succeed in selling
QUANTITY SOLD OR QUANTITY EXCHANGED
WHAT ARE THE 7 KEY FLUXUATORS OF QUANTITY SUPPLIED?
(2)PP: prices of your products and others products
i: prices of inputs
t: technology
t: taxes and subsidies
n: number of suppliers
s: significant changes in weather
what is the relationship between q supplied and price
they are POSITIVELY related; the higher the products own price the more its producers will supply, vice versa
What does the supply curve represent?
quantity supplied and price, positively related
graphically, how is supply affected by an increase/ decrease of quantity supplied
increase: shift rightward
decrease: shift leftward
how do the 7 fluxuators of supply affect the supply curve?
P:
Decrease in price of oats = increase in supply of wheat/barley
I:
A rise in input prices reduces profitability and shifts supply curve to the left, vice versa
T:
Increase Technology = increase profitability = Right shift
T:
taxes = less profit = shift to left
Subsidies = more profit = shift to right
N:
more suppliers = more profit = shift to right, vice versa
S:
varies, mainly agriculture sector, hurricanes affect crops etc
change in supply vs change in quantity supplied
quantity supplied: movement from one point on supply curve to another point (adding on to the same line)
increase in q supplied = movement up and rightward on the line
Supply; shift of the entire curve (the entire line moves)
increase in supply curve = shift to right
WHAT ACTIONS CAN RESULT IN A CHANGE OF QUANTITY SUPPLIED
- CHANGE IN SUPPLY WITH THE PRICE CONSTANT
- MOVEMENT ALONG A GIVEN SUPPLY CURVE BECAUSE OF THE CHANGE OF PRICE
- COMINATION OF THE TWO
definition of a market
a place (physical or not) in which buyers and sellers exchange goods and services
what is a perfectly competitive market
a market so large that no single one of them has any appreciable influence on market prices
What is equilibrium Price
quantity demanded = quantity supplied (until disturbed by some change in market conditions that shifts the demand/supply curve)
what are the 4 possible shifts in market equilibrium
how do they affect equilibrium price and quantity?
- Increase in demand (right shift demand); increase in both equilibrium P and Q
-decrease in demand (left shift demand); Decrease in both equilibrium P and Q
- increase in supply (right shift supply); Decrease in equilibrium P, increase in equilibrium Q
- decrease supply (left shift supply); increase in equilibrium P, Decrease in equilibrium Q
At any price above the equilibrium price, there will be excess ______
At any price below the equilibrium price there will be excess____
Supply
Demand
