Econ 4 And 5 Flashcards
Any place where buyers and sellers meet to exchange goods and services
Markets
Combo of quantities that some one would be willing and able to buy over a range of possible prices at a given moment
Demand
Rule stating that more will be demanded a lower prices and less at higher prices
Law of demand
5 factors that influence that demand of goods
1 tastes and preferences of the consumer= fashions and clothes
2 income of people
3 change in prices of related products (tea vs coffee)
4 advertisement expenditures (ads greatly influence consumer)
5 the number of consumers in the market ( the greater the number the higher demand)
The amount of product a producer or seller would be willing to offer for sale at all possible prices in a market at a given point in time
Supply
The principle that more will be offered for sale at higher prices than at lower prices
Law of supply
5 factors that influence the supply of goods
1 price (if price of product increases supply increases and vice versa) 2 cost of production 3 natural conditions 4 technology 5 government policies
The ability to change/adapt
Elasticity
The responsiveness of quantity supplied to a change in price
Elasticity Of supply
Two major types of supply elasticity
1 elastic supply- a slight change in price will lead to a drastic change in demand and quantity
2 inelastic supply- is when a change in the price have little t no effect on demand and quantity
Something that motives
Incentives
A government payment to encourage or protect a certain economic activity
Subsidy
Costs of production that do not change when output changes
Fixed cost
Production cost that vary as output changes
Variable cost
A broad category of fixed costs that includes interest rent taxes and executive salaries
Overhead
