Micro Modules 5-9 & 46-49

Question 1

key feature of a competitive market

Answer 1

no single individual’s actions have a noticeable effect on the price at which the good or service is sold

Question 2

the demand curve

Answer 2

the higher the price, the less of the good or service people want to purchase; alternatively, the lower the price, the more of the good or service people will want to purchase

Question 3

the demand schedule

Answer 3

a table that shows how much of a good or service consumers will want to buy at different prices

Question 4

shift right of the demand curve

Answer 4

increase in demand- at any given price, consumers demand a larger quantity of the good or service than before; roses on valentines day

Question 5

shift left of the demand curve

Answer 5

decrease in demand- at any given price, consumers demand less the good or service than before; roses the day after valentines day

Question 6

5 principal factors that shift the demand curve for a good or service

Answer 6

• changes in taste
• changes in the price of related goods or services
• changes in income
• changes in numbers of consumers(buyers)
• changes in expectations

Question 7

Demand Curve: changes in taste

Answer 7

• due to fads, beliefs, cultural shifts
• has a predictable impact on demand
• when taste changes in favor of the good, more people want to buy it at a given price, so the demand curve shifts right
• when taste changes against the good, fewer people want to buy the good at any given price, so the demand curve shifts left

Question 8

Demand Curve: changes in the price of related goods or services

Answer 8

• substitute goods: chocolate chip cookies and oatmeal cookies; the rise of the price of one good results in increased demand for the other good
• complementary goods: chocolate chip cookies and milk; the rise of the price of one good results in the rise in price of the other good

Question 9

Demand Curve: changes in income

Answer 9

• when individuals have a higher income, they are more likely to purchase more of a good or service at any given price
  Normal goods: the demand for them increases as consumer income increases(driving your own car to work)
  Inferior goods: the demand for them decreases as consumer income increases(taking the bus to work)

Question 10

Demand Curve: changes in the number of consumers (buyers)

Answer 10

• when there are more people to purchase a good or service the demand goes up and vice versa
• ex: a rise in demand for cotton occurred between 2012 and 2013 because of the population growth in that year

Question 11

Demand Curve: changes in expectations

Answer 11

• demand for a good or service is often affected by expectations of its future price
• changes in income also affect changes in expectation

Question 12

Competitive market

Answer 12

a market where there are many buyers and sellers of the same good or service. none of the fuckers can influence the price of which the good or service is being sold at

Question 13

Demand Schedule

Answer 13

shows how much of a good or service consumers will be willing and able to buy at different prices

Question 14

The Law of Demand

Answer 14

says that the higher price of a good or service, all other things being equal, leads to stinky fuckers(consumers) to demand a smaller quantity of that good or service

Question 15

Quantity Demanded

Answer 15

the actual amount of a good or service consumers are willing and able to buy at some specific price

Question 16

Change in demand(shift)

Answer 16

a shift of the demand curve- changes the quantity demanded at any given price

Question 17

Movement Along the Demand Curve

Answer 17

a change in quantity demanded of a good that is a result of a change in the good’s price

Question 18

Substitute goods

Answer 18

if a price of one good leads to an increase in the demand for the other good

Question 19

Complementary goods

Answer 19

if a rise in the price of one good leads to decrease in demand for the other good

Question 20

Normal and Inferior goods relationship

Answer 20

when a rise in income increases the demand for a good(normal good) which decreases demand for the other good(inferior good)

Question 21

Individual demand curve

Answer 21

illustrates the relationship between quantity demanded and price for an individual consumer

Question 22

Market demand curve

Answer 22

shows the combined quantity demanded by all consumers

Question 23

The Supply Curve

Answer 23

the quantity that producers are willing to produce and sell(the quantity supplied)depends on the price they are offered to make it

Question 24

Supply Curve: shifts of the curve

Answer 24

rightward shift: at any given price producers will supply a larger quantity of the good than before
leftward shift of the curve: at any given price producers will supply a smaller quantity of the good than before

Question 25

5 principle factors that shift the supply curve of a good or service

Answer 25

• input prices
• the prices of related goods or services
• producer expectations
• number of producers
• technology
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Question 26

Supply Curve: Changes in input prices

Answer 26

• to produce outputs (goods) you need inputs
• increase of input $: makes the production of the final good more expensive for producers: leftward shift
• decrease of input $: makes the production of the final good less expensive for producers: rightward shift

Question 27

Supply Curve: Changes in the Prices of Related Goods

Answer 27

• a single producer often produces a mix of goods rather than a single product
• when a producer sells several products, the quantity of a good a producer is willing to supply depends on the prices of co-produced goods

Question 28

Supply Curve: Changes in Producer Expectations

Answer 28

when suppliers have a choice in when to sell their goods, changes in expected future price of the good can lead to a supply change of the good today

Question 29

Supply Curve: Changes in Number of Producers

Answer 29

a market with many producers will supply a larger quantity of a good than a market with a single producer, all other things being equal

Question 30

Supply Curve: Changes in Technology

Answer 30

Technology: the methods people can use to turn inputs into useful goods and services

• improvements in technology enable producers to spend less of inputs while still producing the same output
• when better technology becomes available, reducing the cost of production, the supply curve shifts right

Question 31

Quantity Supplied

Answer 31

the amount of a good or service people are willing to sell at a specific price

Question 32

Supply Schedule

Answer 32

shows how much of a good or service producers would supply at different prices

Question 33

Law of Supply

Answer 33

says that all other things being equal, the price and quantity supplied of a good are positively related

Question 34

Change in Supply

Answer 34

a shift of the supply curve, which changes the quantity supplied at any given price

Question 35

Movement Along the Supply Curve

Answer 35

a change in the quantity supplied a good arising from a change in the goods price

Question 36

Individual Supply Curve

Answer 36

illustrates the relationship between quantity supplied and price for an individual producer

Question 37

Market Supply Curve

Answer 37

shows how the combined total quantity supplied by all individual producers in the market depends on the market price of that good