Lesson 2 Flashcards
refers to the behaviour of people with regard to their willingness and ability to buy products at given prices. Without the willingness or their ability to buy (called purchasing power), the needs and wants of consumers cannot be considered their ______
Demand
is a condition in the market where the quantity supplies is more than the quantity demanded. When there is a ______, the tendency is for sellers to lower market prices in order for the goods and services to be easily disposed from the market.
Surplus
happens when there are more products sold in the market by sellers but few products are bought by consumers. This is because the quantity of goods that buyers are willing to buy at a given price is less than the quantity of goods that sellers are willing to sell at the same price
Shortage
is basically a condition in the market in which quantity demanded is higher than quantity supplied at a given price. ______ happens when quantity demanded is greater than quantity supplied at a given price.
Shortage
When this happens, there is an upward pressure on prices to restore equilibrium in the market. In this particular situation, it is the consumers who will influence the price to go up since they will bid up prices in order for them to acquire the goods or services that are in short supply.
Shortage
is a specification by the government of minimum or maximum prices for certain goods and services
Price Controls
is the legal minimum price imposed by the government on certain goods and services. A price at or above the price floor is legal; a price below it is not. The setting of a ________________is undertaken by the government if a surplus in the economy persist.
Floor price
Generally, the policy is resorted to in order to prevent bigger losses on the part of the producers. _______________ is a form of assistance to producers by the government for them to survive in their business.
Floor Price
is the legal maximum price imposed by the government. A __________is usualy below the equilibrium price. A __________ is therefore imposed by the government to protect the consumers from abusive producers or sellers who take advantage of the situation. This is usually done by the government after the occurrence of a clamity like typhoon or severe flooding.
Price ceiling
refers to the tabular presentation of prices and their corresponding quantities supplied by suppliers.
Supply Schedule
is a graphical depiction of a supply schedule. The general appearance of this curve is an upward sloping curve from left to right.
supply curvs
states that as the price of the commodity increases, quantity supply increases and vice versa. In simple words “when price of the commodities tend to increase, the quantity being supplied by producers also tend to increase; while the opposite also holds true, such that when prices of commodities in consideration tends to decrease.” These observations though, only hold true when all other things are held constant (ceteris paribus).
Law of supply
states that as the price of the commodity increases, quantity supply increases and vice versa. In simple words “when price of the commodities tend to increase, the quantity being supplied by producers also tend to increase; while the opposite also holds true, such that when prices of commodities in consideration tends to decrease.” These observations though, only hold true when all other things are held constant (ceteris paribus).
Law of supply
is the degree of responsiveness with which quantity demand changes for every given change in price.
Elasticity of deman
may also be known as the ratio of the proportional change in the quantity demanded of a product, to the proportional change in the price of a product.
Price elasticity of demand
