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ECON > LESSON 2 SUPPLY AND DEMAND > Flashcards

LESSON 2 SUPPLY AND DEMAND Flashcards

1
Q

The willingness and ability of buyers to purchase different
quantities of a good*/ at different prices/ during a specific time period
(per day, week, etc).

A

Demand

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2
Q

Unless both willingness and ability to buy are present, there is no
demand, and a person is not a buyer. TRUE OR FALSE

A

TRUE

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3
Q

As the price of a good rises, the quantity demanded of the good falls, and that as the price of a good falls, the quantity demanded of the good rises

A

Law of Demand

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4
Q

Price of a good and quantity demanded of it are inversely related

A

ceteris paribus.

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5
Q

is the specific number of units of a good that individuals are willing
and able to buy at a particular price during a time period

A

Quantity demanded

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6
Q

It is the graphical representation of the inverse relationship between price and quantity demanded specified by the law of demand.

A

A (downward-sloping) demand curve

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7
Q

This states that, for a given time period, the marginal utility
(additional satisfaction) gained by consuming equal successive
units of a good will decline as the amount consumed increases.

A

The law of diminishing marginal utility

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8
Q

represents the price-quantity
combinations of a particular good for a single buyer.

A

individual demand curve

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9
Q

represents the price-quantity combinations
of good for all buyers.

A

market demand curve

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10
Q

A change in quantity demanded is the same as a change in demand. TRUE OR FALSE?

A

FALSE (NOT SAME)

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11
Q

A movement from one point to another point on the same demand curve caused by a change in the price of the good.

A

Change in quantity demanded

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12
Q

A change (increase) in demand means that individuals are willing and able to
buy more units of the good at each and every price

A

Change in demand

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13
Q

Factors Causing the Demand Curve to Shift

A
  1. Income
  2. Preferences
  3. Prices of related goods
  4. Number of buyers
  5. Expectations of future prices
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14
Q

Change in quantity demanded is caused by rationing device. TRUE OR FALSE?

A

FALSE (PRICE)

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15
Q

As a person’s income changes, that individual’s demand for a
particular good will not change. TRUE OR FALSE

A

FALSE (IT WILL CHANGE)

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16
Q

is a good for which demand
rises (falls) as income rises (falls)

A

NORMAL GOODS

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17
Q

demand falls as income rises

A

inferior good

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18
Q

demand does not change as income rises or falls

A

neutral good

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19
Q

People’s preferences affect the amount of a good they bare willing to
by at a particular price. TRUE OR FALSE

A

TRUE

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20
Q

A change in preferences in favor of a good shifts the demand curve
left ward. TRUE OR FALSE?

A

FALSE ( RIGTH WARD)

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21
Q

Goods are_________If they satisfy similar needs or desires.
If the price of a good rises, the demand for the substitute
rises.

A

Substitute

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22
Q

Goods are_________if they are consumed jointly. If two
goods are complements, as the price of one rises, the
demand for the other falls.

A

complement

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23
Q

More buyers mean less demand. TRUE OR FALSE

A

FALSE ( HIGHER DEMAND)

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24
Q

Buyers who expect the price of a good to be higher next month may
buy it now, thus increasing the current demand for the good. TRUE OR FALSE

A

TRUE

25
Q

The willingness and ability of sellers to produce and offer to sell
different quantities of a good*/ at different prices/ during a specific
time period (per day, week, etc).

A

SUPPLY

26
Q

As the price of a good rises, the quantity supplied of the good rises, and as
the price of a good falls, the quantity demanded of the good falls,

A

Law of Supply

27
Q

is the specific number of units of a
good that sellers are willing and able to sell at a
particular price during a time period.

A

Quantity supplied

28
Q

holds for the production
of most goods. It does not hold when there
is no time to produce more units of a good,
or if it cannot be produced anymore

A

Law of Supply & Supply Curve

29
Q

This law states that as ever larger
amounts of variable inputs are combined with fixed inputs, eventually
the marginal physical product of the variable input will decline.

A

law of diminishing marginal returns

30
Q

represents the price-quantity
combinations of a particular good for a single seller

A

individual supply curve

31
Q

represents the price-quantity combinations
for all sellers of a particular good. This is derived by “adding up”
individual supply curves

A

market supply curve

32
Q

numerical tabulation of the quantity supplied of a
good at different prices; the numerical representation of the law of
supply

A

Supply schedule

33
Q

An increase in supply shifts the entire supply curve to the left. TRUE OR FALSE

A

FALSE ( RIGHT)

34
Q

A decrease in supply shifts the entire supply curve to the left. TRUE OR FALSE

A

TRUE

35
Q

Factors Causing the Supply Curve to Shift

A
  1. Prices of relevant sources
  2. Technology
  3. Prices of other goods
  4. Number of sellers
  5. Expectations of future price
  6. Taxes and subsidies
  7. Government restrictions
36
Q

If the price of a resource falls, producing the good becomes less
costly. TRUE OR FALSE

A

TRUE

37
Q

With lower costs and prices unchanged, the profit from producing
and selling the good has decreased. TRUE OR FALSE

A

FALSE( INCREASED)

38
Q

Is the body of skills and knowledge concerning the use of
resources in production

A

Technology

39
Q

An advance in technology may lead to the ability to produce less
output with a fixed amount of resources, reducing per-unit
production costs. TRUE OR FALSE

A

FALSE ( MORE OUTPUT)

40
Q

If the per-unit production costs of a good decline, we expect the
quantity supplied of the good at each price to increase. TRUE OR FALSE

A

TRUE

41
Q

Prices of Relevant Resources LEFT OR RIGHT WARD SHIFT?

A

RIGHTWARD SHIFT

42
Q

Technology LEFT OR RIGHT-WARD SHIFT?

A

RIGHT WARD SHIFT

43
Q

If more sellers begin producing a good, the supply curve will shift leftward.TRUE OR FALSE

A

FALSE ( RIGHT WARD)

44
Q

Expectations of Future Prices LEFT OR RIGHT-WARD SHIFT?

A

LEFT WARD SHIFT

45
Q

If the tax is removed, the supply curve will LEFT OR RIGHT-WARD SHIFT?

A

RIGHT WARD SHIFT

46
Q

is a monetary payment by government to a producer of a
good.

A

Subsidy

47
Q

Subsidy will lead to a?LEFT OR RIGHT-WARD SHIFT?

A

LEFT WARD SHIFT

48
Q

Government Restrictions LEFT OR RIGHT-WARD SHIFT?

A

LEFT WARD SHIFT

49
Q

A movement along the supply curve. It can only be caused by a change in the
price of the good.

A

Change in quantity supplied

50
Q

excess supply; a condition in which the quantity supplied is
greater than the quantity demanded.

A

Surplus

51
Q

excess demand; a condition in which the quantity demanded is
greater than the quantity supplied.

A

Shortage

52
Q

the price at which the quantity
demanded of the good equals the quantity supplied

A

Equilibrium Price (Market-Clearing Price)

53
Q

the quantity that corresponds to equilibrium price;
the quantity at which the amount of the good that buyers are willing and
able to buy equals the amount that sellers are willing and able to sell, and
both equal the amount actually bought and sold.

A

Equilibrium Quantity

54
Q

a price at
which the quantity demanded does not equal the quantity supplied

A

Disequilibrium Price

55
Q

a state of either surplus or shortage in a market

A

Disequilibrium

56
Q

is the difference between the maximum price a
buyer is willing and able to pay for a good or service and the price
actually paid for it

A

Consumers’ Surplus

57
Q

is the difference between the price
sellers receive for a good and the minimum or lowest price for which
they would have sold the good

A

Producers’ (Sellers’) Surplus

58
Q

Consumers’ Surplus + Producers’ Surplus

A

Total Surplus

59
Q

if two
goods are complements, as the price of one rises, the
demand for the other rises. T OR F ?

A

FALSE (DEMAND FALLS)

ECON (9 decks)

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