Chapter 6 Flashcards
What is a shortage?
It’s a situation where quantity demanded is greater than quantity supplied.
What is market equilibrium?
It’s when quantity demanded is equal to quantity supplied.
What is surplus?
It is a situation where quantity supplied is greater than quantity demanded.
What will happen to the equilibrium price if the supply curve shifts a little to the right, but the demand curve shifts a lot to the right?
The price will increase.
What will happen to the equilibrium price if the demand curve shifts a little to the right, but the supply curve shifts a lot to the right?
The equilibrium price will decrease.
As there is a decrease in demand what happens to price?
It decrease i.e Income affects normal good
If there is an increase in demand what else is affected?
The price of a good or service demanded will also increase
If supply there is a decrease in supply what would you expect to increase?
Price would go up because the supply is more scarce
What is a factor that may cause the increase in the supply of something?
The # of firms producing something may increase it
What are factors that would cause the demand curve to change?
- Change in price
- income
- taste
- expectations
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Draw the supply and demand curve
