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Gen Bus 310 > Mod 3 > Flashcards

Mod 3 Flashcards

1
Q

Command economy

A

Government decides what is produced and in which quantities

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2
Q

Mixed economy

A

Private enterprises and the government provide goods and services

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3
Q

Market Economy

A

Market participants (producers + buyers) decide what is produced

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4
Q

Quantity demanded

A

Quantity buyers are willing to buy at a particular price during a specific period

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5
Q

Demand schedule

A

Table that shows quantities of a good or service demanded at different prices during a period

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6
Q

Demand curve

A

Present info in demand schedule in a graph

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7
Q

Law of demand

A

The lower the price of a good, the larger the quantity consumers wish to purchase (all else equal)

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8
Q

Market demand

A

Horizontal summation of demand curves of potential buyers in a market

Aggregate demand for all consumers

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9
Q

Price elasticity of demand

A

How sensitive the quantity demanded is to a change in price

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10
Q

Inelastic Demand

A

Change in price has relatively small effect on the quantity of a good demanded

Price increases → total expenditure increases

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11
Q

Elastic Demand

A

Change in price has relatively large effect on the quantity of a good demanded

Price increases → total expenditure decreases

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12
Q

Determinants of price elasticity (2)

A

Availability of substitutes

Time

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13
Q

Normal good

A

Incomes rise → demand increases

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14
Q

Inferior good

A

Incomes rise → demand decreases

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15
Q

Complements

A

Goods consumed together

Consumption of both will rise or fall together due to price change

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16
Q

Substitutes

A

Goods that replace each other

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17
Q

Supply schedule

A

Table that shows quantity supplied at different prices

18
Q

Quantity supplied

A

Quantity sellers are willing to sell at a certain price during a certain period

19
Q

Supply curve

A

Shows relationships between price and quantity supplied

20
Q

Law of supply

A

The higher the price of a good, the larger the quantity firms want to produce (all else equal)

21
Q

Market supply

A

Aggregate supply of all producers

Horizontal summation of supply curves of potential sellers in a market

22
Q

Elastic Supply

A

Small change in price causes large increase in production

23
Q

Inelastic Supply

A

Small change in price causes small increase in production

24
Q

Surplus

A

Excess supply of a good due to price above equilibrium

25
Q

Shortage

A

Excess demand for a good due to price below equilibrium

26
Q

Equilibrium

A

Demand = Supply

27
Q

Price and quantity increase

A

Demand shifts out

28
Q

Price and quantity decrease

A

Demand shifts in

29
Q

Price decrease + quantity increase

A

Supply shifts out

30
Q

Price increase + quantity decrease

A

Supply shifts in

31
Q

Change in demand

A

Shift in a demand curve due to changes in non-price factors

32
Q

Non-price factors (demand) (5)

A

Preferences

Price of related goods

Income

Demographic characteristics

Buyer expectations

33
Q

Change in supply

A

Shift in a supply curve due to changes in non-price factors

34
Q

Non-price factors (supply) (6)

A

Price of inputs

Opportunity cost of alternative activities

Technology

Seller expectations

Natural events

Taxes and subsidies

35
Q

Change in quantity demanded

A

Change in the amount buyers will purchase due to a change in price

36
Q

Change in quantity supplied

A

Change in the amount producers will sell due to a change in price

37
Q

Preferences

A

Feelings of consumers about the desirability of different goods

38
Q

Price elasticity of demand

A

How sensitive the quantity demanded is to a change in price

39
Q

Price elasticity of supply

A

How sensitive the quantity supplied is to a change in price

40
Q

Total expenditure

A

The total amount of money spent on a good or service at a given price

(P x Q)

Gen Bus 310 (15 decks)

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