micro chapter 3 Flashcards

1
Q

what are 3 non-price factors that may influence your demand for a good or service

A

.disposable income
.price of other goods
.personal preference

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2
Q

what is joint demand

A

demand for goods that are dependent such that they are demanded together

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3
Q

what is composite demand

A

demand for a good that has multiple uses

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4
Q

what is competitive demand

A

demand for goods that are in competition with each other

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5
Q

define ceterius peribus

A

meaning ‘all other thing equal’ and is used when we examine one variable while holding other influences

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6
Q

what is the law of demand ( and therefore the demand curve relationship)

A

there is an inverse relationship between quantity demanded and the price of a good or service ceteris paribus

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7
Q

what does the demand curve actually show

A

a graph showing how much of a good will be demanded by consumers at any given price

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8
Q

what will a shift in price (only) cause the demand curve to do

A

shift in price , ceterius paribus will cause movement along the demand curve, extension or contraction

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9
Q

what will a change in non-price factors ceterius paribus cause on the demand curve

A

it will cause a shift, moving the entire demand curve inwards or outwards

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10
Q

what factors cause demand curve to SHIFT (5)

A

.change in disposable income
.change in trends/preferences
.advertising
.changes in prices of substitute goods
.changes in prices of complementary goods
.changes in population
.seasonal factors

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11
Q

define a nominal good

A

good where the quantity demanded increases in response to an income in consumer good (organic food, luxury clothes, advanced tech)

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12
Q

define inferior goods

A

goods where the quantity of demand decreases in response to an increase in consumer income

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13
Q

what will happen to demand curve of normal goods when income increases

A

increase in disposable income will cause an outward shift

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14
Q

what will happen to demand curve of inferior goods when income increase

A

increased disposable income will shift the demand curve inwards as more people can afford other more expensive options

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15
Q

define consumer surplus

A

is the difference between the total amount that costumers are willing and able to pay for a good or service and the market value (total amount they actually pay)

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16
Q

what will happen to consumer surplus if the price of a good increase

A

it will reduce the overall size of consumer surplus

17
Q

what are the factors that shift the supply curve (PINTSWC)

A

-Productivity
-Indirect taxes
-Number of firms
-Technology
-Subsides
-Weather
-Costs of production

18
Q
A