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BASIC MICROECONOMICS > M3 PT.1 > Flashcards

M3 PT.1 Flashcards

1
Q

In economics, understanding the distinction between demand and quantity demanded is essential for

A

analyzing how markets function.

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2
Q

refers to the entire relationship between the price of a good or service and the quantity consumers are willing and able to purchase at various prices over a given period.

A

DEMAND

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3
Q

graphically represents the relationship between the price of a good and the quantity demanded at each price.

A

DEMAND CURVE

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4
Q

It typically slopes downward from left to right, indicating an inverse relationship between price and quantity demanded

A

DEMAND CURVE

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5
Q

Demand curve typically slopes ___ from____, indicating an inverse relationship between price and quantity demande

A
  • DOWNWARDS
  • LEFT TO RIGHT
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6
Q

Changes in tastes and preferences can shift demand.

A

CONSUMER PREFRENCES

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7
Q

FACTORS AFFECTING DEMAND

A
  • CONSUMER PREFERENCES
  • INCOME LEVELS
  • PRICE OF RELATED GOODS
  • FUTURE EXPECTATION
  • NUMBER OF BUYERS
  • EXTERNAL FACTORS
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8
Q

Higher income generally increases demand for normal goods. (factor affecting demand)

A

INCOME LEVELS

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9
Q

Substitutes and complements affect demand. An increase in the price of a substitute can increase demand, while an increase in the price of a complement can decrease demand.

A

PRICE OF RELATED GOODS

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10
Q

Expectations of future prices or income can affect current demand.

A

FUTURE EXPECTATION

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11
Q

More buyers in the market increase demand.

A

NUMBER OF BUYERS

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12
Q

Events, seasons, and trends can also influence demand.

A

EXTERNAL FACTORS

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13
Q

A change in any of the factors affecting demand (other than the price of the good itself) causes the demand curve to shift.

A

SHIFTS IN DEMAND

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14
Q

Shifts the demand curve to the right.

A

INCREASE IN DEMAND

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15
Q

Shifts the demand curve to the left.

A

DECREASE IN DEMAND

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16
Q

refers to the specific amount of a good or service that consumers are willing and able to purchase at a particular price, holding all other factors constant.

A

QUANTITY DEMANDED

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17
Q

It is a point on the demand curve.

A

QUANTITY DEMANDED

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18
Q

Entire relationship between price and quantity.

A

DEMAND

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19
Q

Specific amounts consumers are willing to buy at a particular price.

A

QUANTITY DEMANDED

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20
Q

Changes in non-price factors (income, preferences, etc.).

A

DEMAND

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21
Q

Change in the price of the good itself

A

QUANTITY DEMANDED

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22
Q

reflects the broader relationship between price and consumption, encompassing all price points and influenced by various factors

A

DEMAND

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23
Q

focuses on the specific amount purchased at a given price, illustrating movements along the demand curve due to price changes.

A

QUANTITY DEMANDED

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24
Q

fundamental principle in economics that describes the inverse relationship between the price of a good or service and the quantity demanded by consumers, assuming all other factors remain constant (ceteris paribus).

A

LAW OF DEMAND

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25
Q

This principle is a cornerstone of microeconomic theory and helps explain consumer behavior in response to price changes.

A

LAW OF DEMAND

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26
Q

As the price of a good or service decreases, the quantity demanded increases. Conversely, as the price increases, the quantity demanded decreases, all else being equal.

A

LAW OF DEMAND

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27
Q

An increase in demand, where more of the good is demanded at each price.

A

RIGHTWARD SHIFT

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28
Q

A decrease in demand, where less of the good is demanded at each price.

A

LEFTWARD SHIFT

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29
Q

a foundational concept that explains how price changes affect consumer purchasing behavior.

A

LAW OF DEMAND

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30
Q

are those whose demand increases as consumer income rises, and conversely, decreases when consumer income falls.

A

NORMAL GOODS

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31
Q

This positive relationship between income and demand is known as a positive income elasticity of demand.

A

NORMAL GOODS

32
Q

This positive relationship between income and demand is known as a

A

POSITIVE ELASTICITY INCOME OF DEMAND

33
Q

These items cost more than inferior goods and are typically of higher quality.

A

NORMAL GOODS

34
Q

are those whose demand decreases as consumer income rises, and conversely, increases when consumer income falls.

A

INFERIOR GOODS

35
Q

This negative relationship between income and demand is known as a negative income elasticity of demand.

A

INFERIOR GOODS

36
Q

This negative relationship between income and demand is known as a

A

NEGATIVE ELASTICITY INCOME OF DEMAND

37
Q

They generally represent the cheapest options for meeting a consumer’s needs, so they’re satisfactory options for consumers who don’t have a lot of money.

A

INFERIOR GOODS

38
Q

are the type of products people typically purchase when their income is low.

A

INFERIOR GOODS

39
Q

illustrate how consumer demand responds to changes in income.

A

NORMAL AND INFERIOR GOODS

40
Q

see increased demand with rising incomes

A

NORMAL GOODS

41
Q

are goods that can be used in place of each other.

A

SUBSTITUTE GOODS

42
Q

are goods that are used together.

A

COMPLEMENTARY GOODS

43
Q

illustrate different types of relationships between products and how changes in the price of one good can affect the demand for another

A

SUBSTITUTE & COMPLEMENTARY GOODS

44
Q

are factors that influence consumers’ willingness and ability to purchase a good or service.

A

DETERMINANTS OF DEMAND

45
Q

Understanding these factors helps explain shifts in the demand curve

A

DETERMINANTS OF DEMAND

46
Q

There is an inverse relationship between price and quantity demanded. As the price decreases, the quantity demanded increases, and vice versa. This relationship is captured by movements along the demand curve.

A

PRICE OF THE GOOD OR SERVICE

47
Q

For most goods, an increase in income leads to an increase in demand, and a decrease in income leads to a decrease in demand.

A

INCOME OF CONSUMERS (NORMAL GOODS)

48
Q

For some goods, an increase in income leads to a decrease in demand, and a decrease in income leads to an increase in demand.

A

INCOME OF CONSUMERS (INFERIOR GOODS)

49
Q

If the price of a substitute good rises, the demand for the given good increases, and if the price of a substitute falls, the demand for the given good decreases.

A

PRICE OF RELATED GOODS (SUBSTITUTE GOODS)

50
Q

If the price of a complementary good rises, the demand for the given good decreases, and if the price of aComplementary Goods: If the price of a complementary good rises, the demand for the given good decreases, and if the price of a complement falls, the demand for the given good increases.

A

PRICE OF RELATED GOODS (COMPLEMENTARY GOODS)

51
Q

Changes in tastes and preferences, often influenced by advertising, trends, and cultural shifts, can increase or decrease demand.

A

TASTE AND PREFERENCES (CONSUMER PREFERENCES)

52
Q

Popularity and trends can cause significant shifts in demand for certain products.

A

TASTE AND PREFERENCES (TRENDS)

53
Q

If consumers expect prices to rise in the future, they are likely to buy more now, increasing current demand. Conversely, if they expect prices to fall, they may delay purchases, decreasing current demand.

A

EXPECTATIONS OF FUTURE PRICES AND INCOME (PRICE EXPECTATION)

54
Q

If consumers expect their income to rise, they may increase current demand, while expectations of lower future income may decrease current demand.

A

EXPECTATIONS OF FUTURE PRICES AND INCOME (INCOME EXPECTATION)

55
Q

An increase in the number of buyers in the market leads to an increase in demand, while a decrease in the number of buyers leads to a decrease in demand.

A

NUMBE ROF BUYERS (MARKET SIZE)

56
Q

Changes in population size, age distribution, and other demographic factors can influence the overall demand in a market.

A

NUMBER OF BUYERS (DEMOGRAPHICS)

57
Q

Higher taxes on goods can decrease demand, while subsidies can increase demand.

A

GOVERNMENT POLICIES AND REGULATIONS (TAXES AND SUBSIDIES)

58
Q

Government regulations and policies can also affect demand. For instance, safety regulations may increase demand for certain products, while restrictions may decrease demand.

A

GOVERNMENT POLICIES AND REGULATIONS (REGULATIONS)

59
Q

crucial for predicting how changes in various factors will affect the market.

A

DETERMINANTS OF DEMAND

60
Q

help explain why the demand curve shifts and how consumer behavior is influenced by economic conditions, preferences, and external factors.

A

DETERMINANTS OF DEMAND

61
Q

is a table that shows the quantity of a good or service that consumers are willing and able to purchase at various prices during a specified period.

A

DEMAND SCHEDULE

62
Q

provides a clear illustration of the relationship between price and quantity demanded, which is foundational for understanding the Law of Demand.

A

DEMAND SCHEDULE

63
Q

KEY FEATURES OF A DEMAND SCHEDULE

A
  • PRICE LEVELS
  • QUANTITY DEMANDED
64
Q

is a valuable tool for visualizing how the quantity demanded of a good changes in response to different prices.

A

DEMAND SCHEDULE

65
Q

Is a graphical representation of the relationship between the price of a good or service and the quantity demanded over a given period.

A

DEMAND CURVE

66
Q

illustrates how much of a product consumers are willing and able to purchase at various prices, assuming all other factors remain constant

A

DEMAND CURVE

67
Q

a crucial concept in economics, as it helps to visualize and analyze consumer behavior and market dynamics.

A

DEMAND CURVE

68
Q

CAUSES OF SHIFTS

A
  • INCOME
  • PRICE OF RELATED GOODS
  • CONSUMER PREFERENCES
  • EXPECTATIONS
  • NUMBER OF BUYERS
  • GOVERNMENT POLICIES
68
Q

An increase in the price of a substitute good shifts the demand curve to the right. A decrease in the price of a substitute shifts the demand curve to the left.
F SHIFTS

A

PRICE OF RELATED GOODS

69
Q

An increase in the price of a complementary good shifts the demand curve to the left. A decrease in the price of a complement shifts the demand curve to the right.

A

PRICE OF RELATED GOODS

70
Q

A change in tastes and preferences in favor of a good shifts the demand curve to the right, while a change against the good shifts it to the left.

A

CONSUMER PREFERENCES

71
Q

If consumers expect prices to rise in the future, current demand increases, shifting the curve to the right. If they expect prices to fall, current demand decreases, shifting the curve to the left.

A

EXPECTATIONS

72
Q

An increase in the number of buyers shifts the demand curve to the right. A decrease in the number of buyers shifts it to the left.

A

NUMBER OF BUYERS

73
Q

Taxes, subsidies, and regulations can also affect demand. Subsidies typically shift the demand curve to the right, while taxes shift it to the left.

A

GOVERNMENT POLICIES

74
Q

ILLUSTRATING SHIFTS

A

RIGHTWARD AND LEFTWARDS SHIFTS

BASIC MICROECONOMICS (7 decks)

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