Microeconomics Week 3 Flashcards
Economic principle referring to a consumer’s desire to purchase goods and services and willingness to pay a price for a specific good or service
Demand
Visual representation of how many units of a good or service will be bought at each possible price
Demand curve
When a price decrease causes a significant increase in the quantities bought
Elastic demand
When a price decrease, it won’t increase the quantities purchased
Inelastic demand
If demand is perfectly inelastic, the curve looks like a
vertical straight line
The relationship between price and quantity demanded is
inverse
Fundamental economic concept that describes the total amount of a specific good or service that is available to consumers.
Supply
graphic representation of the correlation between the cost of a good or service and the quantity supplies for a given period
Supply curve
price of substitutes and complementary goods could also affect the supply of a product
Price
If it increases, the supply of product would shrink so as to save the resources
Cost of production
____ advances can improve the production efficiency and therefore cut down the cost spent for production
Technology
The lower the tax, the higher the supply of that product
Governments’ policies
Always a constraint to the supply of products, as the products are not available on time due to poor transport facilities
Transportation condition
Chart that shows how much product a supplier will have to produce to meet consumer demand at a specified price based on the supply curve
Supply schedule
A situation where for a particular good supply = demand.
Market equilibrium
