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ECON265-Microeconomics > Chapter 4 > Flashcards

Chapter 4 Flashcards

1
Q

Increase in Demand

A

P* increases
Q* increases
Demand curve right
upward movement along the supply curve towards new Equilibrium

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2
Q

Decrease in Demand

A

P* decreases
Q* decreases
downward movement along the supply curve towards new Equilibrium

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3
Q

Increase in Supply

A

P* decrease
Q* increase
downward movement along the demand curve towards new Equilibrium

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4
Q

Decrease in supply

A

P* increase
Q* decrease
upward movement along the demand curve towards new Equilibrium

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5
Q

Increase in expected price

A

Increase in demand = rightward shift
Decrease in supply = leftward shift
P* increase
Q* ambiguous

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6
Q

Decrease in expected price

A

Decrease in demand = leftward shift
Increase in supply = rightward shift
P* decrease today
Q* ambiguous

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7
Q

Equilibrium Price Increase

A 
zIncrease in Demand 
P* Increases
Q* Increases
Entry of new firm
Increase in Supply
Q*1 => Q*2 => Q*3, Q* Increases
Between Q*1-Q*3, ambiguities
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8
Q

Increase in Demand > Increase in Supply

A

P*1

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9
Q

P*1

A

P1 = P3

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10
Q

Increase in Demand

A

P1 > P3

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11
Q

P1 > P3

A

Increase in Demand
P* Decrease
Q* Decreases
Q1 => Q2 => Q3, Q Decrease

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12
Q

Price Ceiling

A

Maximum legal price

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13
Q

binding price ceiling

A

Price ceiling

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14
Q

Price ceiling >= P*

A

non-binding price ceiling

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15
Q

shortage

A

Quantity Demanded - Quantity supplied

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16
Q

Effects of price control

A

Bribery/Discrimination
Black market
Quality of housing decrease
Growth rate of new apartments decreases

17
Q

Alternative to price control

A

Subsidize new apartments

18
Q

Price Floor

A

Minimum legal price(

19
Q

binding wage floor

A

Wage floor > W*

20
Q

Unemployment

A

Labor supplied - Labor demanded

21
Q

Reasons for unemployment

A

Lease education, experience, training, skills

22
Q

Alternatives for agriculture

A

subsidize to produce less

Export surplus to other country

23
Q

Reason for NonBinding

A

Preventive action

24
Q

Market Failure

A

Fails to allocate resources efficiently

25
Q

Lack of competition

A

Too few firms = P* too high

26
Q

Positive Externality

A

Free-rider problem

27
Q

Negative Externality

A

smokers, Taxes imposed to reduce impact

28
Q

Income Inequality/poverty

A

Anti poverty programs/welfare - social security, wic, medicare, unemployment

ECON265-Microeconomics (17 decks)

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