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Ecn > Demand and supply > Flashcards

Demand and supply Flashcards

1
Q

A movement along the demand curve stems from

A

Change in price

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2
Q

A movement along the demands curve resulting from a change in price is known as

A

Change in qd

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3
Q

A shift in a demand curve is known as

A

A change in demand

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4
Q

A change in other variables held constant in constructing a demand schedule that will change qd at each price is known as?

A

A shift

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5
Q

A good for which demand increases when income increases is known as

A

Normal good

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6
Q

A good for which Demand decreases when income increases is known as

A

An inferior good

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7
Q

An increase in income shifts the demand curve for fresh fruit to the?

A

Right

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8
Q

An increase in income shifts the demand for canned food to the?

A

Left

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9
Q

Examples or types of demand shifters?

A

Preference or taste
Income
Buyer expectations
Demographic characteristics (population )
Prices of related goods and services

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10
Q

A demand curve slopes…?

A

Downward

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11
Q

A change in any of the variables affecting supply asides price will cause a

A

Shift in the supply curve

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12
Q

A change that causes qs to increase at each price will cause the supply curve to shift to the?

A

Right

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13
Q

A change that causes qs to decrease at each price will cause the supply curve to shift to the?

A

Left

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14
Q

A variable that can change qs at each price is known as

A

A supply shifter

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15
Q

An increase in any factor of production will lead to

A

A decrease in qs

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16
Q

The equilibrium price in any market is the price at which..?

A

QD=QS

17
Q

The amount where the qs exceeds qd at current price is called?

A

Surplus

18
Q

A price below equilibrium will cause..?

A

Shortages

19
Q

The point where QD exceeds QS at current price

A

Shortage

20
Q

When surplus occurs, sellers tend to?

A

Reduce the price of their good until it reaches equilibrium

21
Q

Market Surpluses and Shortages are usually………-lived?

A

Short

22
Q

What is a price floor?

A

Set by the government, a price floor is the minimum allowable price set above the equilibrium price

23
Q

What is a price ceiling?

A

Set by the government, it is the maximum allowable price, set above the equilibrium price

24
Q

Used to describe the responsiveness in the quantity demanded of a good or service when the price of another good or service changes

A

Cross Elasticity Of Demand

25
Q

The cross elasticity of demand of substitutes is…?

A

Positive

26
Q

The cross elasticity of complementary goods is…?

A

Negative

27
Q

The cross elasticity of demand of goods that are not related is…?

A

Zero

28
Q

Formula for income elasticity

A

Percentage change in qd / percentage change in income

29
Q

What is an inferior good?

A

An increase in income reduces the demand for it

30
Q

What is a normal good?

A

An increase in income increases the demand for it

31
Q

What type of income elasticity of demand depicts an inferior good?

A

Negative income elasticity of demand

32
Q

What type of income elasticity of demand depicts a normal good?

A

Positive

33
Q

Formula for cross elasticity of demand

A

Change in qd of good A / Change in qd of good B

34
Q

Changes in equilibrium occurs when…?

A

The supply and demand curve shifts

35
Q

Change in equilibrium will lead to…?

A

A change in equilibrium price and quantity

36
Q

What is elasticity of demand?

A

Responsiveness of QD of a commodity to changes in one of the variables of which demand depends

37
Q

What is elasticity

A

Used to measure responsiveness of one variable as a result of a change in another

38
Q

The normal relationship between price and qd is…?

A

Negative

39
Q

Price elasticity of demand is simply the ratio of percentage change in ……….. to …….?

A

QD to Price

Ecn (3 decks)

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