CHAPTER 3 MIDTERM

Question 1

WHAT ARE THE 5 LARGEST INFLUENCERS IN DEMAND FLUXIATION

Answer 1

1. CHANGES IN THE WEATHER
2. POPULATION
3. CONSUMERS’ TASTES
4. PRICES OF OTHER GOODS
5. CONSUMERS INCOME
   CPCPC

Question 2

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)
______
.

Answer 2

a) per period of time

b) time period

c) flow variable

Question 3

WHAT DOES
ceteris paribus TRANSLATE TO?
B) WHAT DOES IT MEAN IN THE CONTEXT OF ECONOMICS?
.

Answer 3

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

Question 4

what is stock variable vs flow variable

Answer 4

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

Question 5

INCREASE DEMAND = D SHIFT TO RIGHT

Question 6

WHAT IS DEMAND VS QUANTITY DEMANDED

Answer 6

DEMAND: the entire demand curve

QUANTITY DEMANDED: a particular point on the demand curve

Question 7

WHAT ACTIONS CAN RESULT IN A CHANGE OF QUANTITY DEMANDED

Answer 7

1. SHIFT IN DEMAND CURVE WITH CONSTANT PRICE
2. MOVEMENT ALONG A GIVEN DEMAND CURVE DUE TO A CHANGE IN THE PRICE,
3. BOTH AT THE SAME TIME

Question 8

HOW DOES AN INCREASE IN DMEAND AFFECT THE DEMAND CURVE

Answer 8

SHIFT TO THE RIGHT, QUANTITY DEMANDED IS HIGHER AT EACH PRICE

Question 9

WHEN A PRICE RISES FOR A NORMAL GOOD, WHAT HAPPENS TO THE INFERIOR GOOD

Answer 9

DEMAND CURVE SHIFTS TO THE RIGHT (INCREASE DEMAND)

Question 10

Quantity demanded is the

Answer 10

TOTAL AMOUNT OF A GOOD THAT CONSUMERS WISH TO PURCHASE AT A GIVEN PRUCE DURING A GIVEN TIME

Question 11

A demand schedule is

Answer 11

A TABLE SHOWING THE RELATIONSHIP BETWEEN QUANTITY DEMANDED AND THE PRICE OF A COMMODITY, OTHER THINGS BEING EQUAL

Question 12

Quantity Supplied is?

Answer 12

the amount of good or service producers want to sell in some time period. FLOW VARIABLE

Question 13

what is the term for the amount that producers succeed in selling

Answer 13

QUANTITY SOLD OR QUANTITY EXCHANGED

Question 14

WHAT ARE THE 7 KEY FLUXUATORS OF QUANTITY SUPPLIED?

Answer 14

(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

Question 15

what is the relationship between q supplied and price

Answer 15

they are POSITIVELY related; the higher the products own price the more its producers will supply, vice versa

Question 16

What does the supply curve represent?

Answer 16

quantity supplied and price, positively related

Question 17

graphically, how is supply affected by an increase/ decrease of quantity supplied

Answer 17

increase: shift rightward
decrease: shift leftward

Question 18

how do the 7 fluxuators of supply affect the supply curve?

Answer 18

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

Question 19

change in supply vs change in quantity supplied

Answer 19

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

Question 20

WHAT ACTIONS CAN RESULT IN A CHANGE OF QUANTITY SUPPLIED

Answer 20

• CHANGE IN SUPPLY WITH THE PRICE CONSTANT
• MOVEMENT ALONG A GIVEN SUPPLY CURVE BECAUSE OF THE CHANGE OF PRICE
• COMINATION OF THE TWO

Question 21

definition of a market

Answer 21

a place (physical or not) in which buyers and sellers exchange goods and services

Question 22

what is a perfectly competitive market

Answer 22

a market so large that no single one of them has any appreciable influence on market prices

Question 23

What is equilibrium Price

Answer 23

quantity demanded = quantity supplied (until disturbed by some change in market conditions that shifts the demand/supply curve)

Question 24

what are the 4 possible shifts in market equilibrium

how do they affect equilibrium price and quantity?

Answer 24

• 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

Question 25

At any price above the equilibrium​ price, there will be excess ______
At any price below the equilibrium price there will be excess____

Answer 25

Supply

Demand