Chapter 5

Question 1

What are the 5 factors that cause change in demand (shifters)?

Answer 1

1. Income
2. Taste and Preference
3. Expectation of future prices
4. Population and demographics
5. price of related goods

Question 2

A good where the demand increase as income incearses would be considered what type of good?

Answer 2

A normal good

Question 3

A good where the demand decreases as income increases would be considered what?

Answer 3

An Inferior good

Question 4

Draw a taste and preferences Graph

(Remember as TP ^ = D ^)

Question 5

If people know there will be an increase in price or a decrease in price will that affect their buying decision today?

Answer 5

Yes if they know something will increase tomorrow then they will buy more today. And if something will decrease tomorrow they will buy more today.

Question 6

Draw the graph for Expectation in future prices before the change in prices

Answer 6

Question 7

Draw the graph for Expectation of future of prices if prices will increase the next day

Answer 7

Question 8

Draw the graph for expectation of future prices if the prices for tomorrow will be decreasing

Answer 8

Question 9

Draw the population and demographics price for demand

Answer 9

Ask about this

Question 10

What is a Subsitute in economics?

Answer 10

This would be a good or service that can be used in place of each other an example would be something like coke or pepsi. Things with different brands but are pretty much the same thing.

(Ask about the graphs of this)

Question 11

What is a compliment in economics?

Answer 11

These are goods or services that have to be used together to satisfy a want or need

i.e Pen and paper

Peanut butter and Jelly

THey are things that affect the sales of the other

Question 12

What does supply mean?

Answer 12

This refers to the amount of a good or service a producer is willing and able to sale at a particular price and time.

Question 13

What is a supply schedule?

Answer 13

This is a table that shows the amount of a good or service that a producer is willing and able to sell at a particular time and price.

Question 14

Draw a supply schedule

Question 15

What is a supply curve?

Answer 15

This is a graphical representation of the supply schedule. It is a graph that shows the amount of a good or service that producers are willing and able to produce at a particular price and time.

Question 16

Draw the supply curve

Question 17

What is the law of supply?

Answer 17

all else equal, an increase in price results in an increase in quantity supplied.[1] In other words, there is a direct relationship between price and quantity: quantities respond in the same direction as price changes. This means that producers are willing to offer more products for sale on the market at higher prices by increasing production as a way of increasing profits.[2]

Question 18

Graph the supply curve

Answer 18

Question 19

What is change in quantity supplied?

Answer 19

This is the movement along the supply curve; it is cause by change in the price in the good or service itself.

Question 20

Draw the graph for quantity supplied

Question 21

What is change in supply?

Answer 21

A change in the price of a good or service, holding all else constant, will result in a movement along the supply curve. A change in the cost of an input will impact the cost of producing a good and will result in a shift in supply; supply will shift outward if costs decrease and will shift inward if they increase

Question 22

What are factors that affect supply?

Answer 22

1. Price of Inputs
2. Technological Change
3. Price of substitutes in production
4. Number of firms in the market
5. Expecting future prices

Question 23

Define price input and do the graph

Answer 23

An input is anything used in the production of a good or service

Question 24

What is the definition of the technological change factor that affects supply?

Answer 24

This si increase or decrease in the ability of a firm to produce a particular level of output with a particular quantity of input

Question 25

What is the definition of price of substitutes in production?

Draw this graph (outline 5)

Answer 25

This refers to alternative goods that a firm can produce