Chapter 4- Supply and Demand Flashcards
Section 4.3 Exhibit 5
Graph the following:
- When the price of a compliement falls or the price of a substitute rises.
- When income increases (normal good)
- When income increasaes (inferior good)
- Increase in the number of buyers in the market.
- Tastes change in favor of the good
- Future price increase expected.
Section 4.5 Exhibit 3
Graph the following:
- Input price (wages) increase.
- Input price falls.
- Price decreases for a substitute in production
- Producer expects now that the price will be lower later.
- Number of suppliers increase.
- Taxes rise.
- Technological advance occurs.
- Bad weather.
A change in _____ _____ _____ leads to a change in quantity demanded, illustrated by a _____ _____ demand curve
a good’s price; movement along
A change in demand is caused by changes in any of the other factors (beside’s a good’s own price) that would affect how much of the good is purchased: the ______ _____ ______ ______, ______, the ______ of buyers, ______, and ______.
prices of related goods; income; number; tastes; expectations
An increase in demand is represented by a _____ shift in the demand curve; a decrease in demand is represented by a _____ shift in the demand curve.
rightward; leftward
Two goods are called _____ if an increase in the price of one causes the demand curve for another good to shift to the _____.
substitutes; right
For normal goods an increase in income leads to a(n) _____ in demand, and a decrease in income leads to a(n) _____ in demand, other things being equal.
increase; decrease
An increase in the expected future price of a good or an increase in expected future income may _____ demand.
Increase
According to the Law of Supply, the higher the price of the good, the greater the _____ _____, and the lower the price of the good, the smaller the, _____ _____.
quantity supplied; quantity supplied
The quantity supplied is positively related to the price because firms supplying goods and services want to increase their ____________ and because increasing ____________ costs mean that the suppliers will require _________ prices to induce them to increase their output.
profits;
production
higher
The market supply curve is a graphical representation of the amount of goods and services that suppliers are ________ and _________ to supply at various prices
willing;
able
Possible supply determinants (factors that determine the position of the supply curve) are ________ prices; ________ of suppliers; and __________, _________, __________, and ____________
input;
expectations;
number;
technology;
regulation;
taxes and susidies;
weather
A fall in input prices will _________ the costs of production, causing the supply curve to shift to the _________
lower;
right
The supply of a good __________ if the prices of one of its substitutes in production falls
increases
The supply of a good ________ if the price of one of its substitutes in production rises
decreases
A(n) ______ is the process of buyers and sellers _____ goods and services
markets; exchanging
The important point about a makert is what it does— it facilitates ______.
trade
_____, as a group, determine the demand side of the market. ____, as a group, determine the supply side of the market.
buyers; sellers
A(n) ____ market consists of many buyers and sellers, no single one of whom can influence the market price.
competitive
According to the law of demand, other things being equal, when the price of a good or service falls, the ____ increases.
quantity demanded
An individual ____ curve reveals the different amounts of a particular good of a person would be willing and able to buy at various possible prices in a particular time interval, others things being equal.
demand
The ____ curve for a product is the horizontal summing of the demand curves of the individuals in the market.
market demand
What is the Law of Demand?
This is an example of a….
Demand Schedule
