Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Microeconomics > Principles of Microeconomics, Chapter 4, 5, and 6 > Flashcards

Principles of Microeconomics, Chapter 4, 5, and 6 Flashcards

1
Q

Difference between “change in demand” and “change in quantity demanded”?

A

If quantity demanded changes, the demand moves along the current demand curve. A change in demand, shifts the entire demand curve.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

A change in the price of a related good changes demand or quantity demanded?

A

Demand

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

A change in tastes changes demand or quantity demanded?

A

Demand

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

A change in the number of buyers changes demand or quantity demanded?

A

Demand

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

A change in the price changes demand or quantity demanded?

A

Quantity demanded

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

A change in consumer expectations changes demand or quantity demanded?

A

Demand

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

A change in income changes demand or quantity demanded?

A

Demand

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What is the difference between “change in supply” and “change in quantity supplied”?

A

Change in quantity supplied moves a point along the existing supply curve. Change in supply moves the entire curve.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

A change in input costs changes supply or quantity supplied?

A

supply

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

A change in the producer expectations changes supply or quantity supplied?

A

supply

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

A change in the price changes supply or quantity supplied?

A

quantity supplied

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

A change in technology changes supply or quantity supplied?

A

supply

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

A change in the number of sellers changes supply or quantity supplied?

A

supply

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Supply and Demand refer to

A

The behavior of people as they interact with one another in competitive markets.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

A Market is

A

a group of buyers and sellers of a particular good or service.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

As a group, buyers

A

determine the demand for the product.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Sellers, as a group

A

determine the supply of the product

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Example of a Highly Organized market

A

Agricultural commodities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Example of a Less Organized market

A

Ice cream in a certain town

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Competitive market is

A

market with many buyers and many sellers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Price and Quantity are determined by

A

all buyers and sellers as they interact in the marketplace.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Perfectly competitive market

A

goods offered for sale are all exactly the same.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Do individual buyer and sellers have influence over the market price?

A

No, they are too numerous

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Quantity demanded

A

the amount of a good that buyers are willing and able to purchase

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Law of demand

A

the claim that, all things being equal, the quantity demanded of a good falls when the price of that good rises.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

demand schedule

A

a table that shows the relationship between the price of a good and the quantity demanded

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

demand curve

A

a graph of the relationship between the price of a good and the quantity demanded

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

Shift in demand curve to the right is

A

an increase in demand

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

Shift in demand curve to the left is

A

a decrease in demand

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

Normal Good

A

a good for which, all things being equal, an increase in income leads to an increase in demand

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

Inferior good

A

a good for which, all things being equal, and increase in income leads to a decrease in demand

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

Substitute goods

A

two goods for which an increase in the price of one leads to in increase of demand for the other.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

Complementary goods

A

two goods for which an increase in the price of one leads to the decrease in demand for the other.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

Quantity supplied

A

the amount of a good that sellers are willing and able to sell

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

Law of Supply

A

the claim that, all things being equal, the quantity of a good supplied rise when the price of that good rises

36
Q

Supply schedule

A

a table that shows the relationship between the price of a good and the quantity supplied.

37
Q

Supply curve

A

a graph of the relationship between the price of a good and the quantity supplied

38
Q

Equilibrium

A

a situation in which the market price has reached the level at which the quantity supplied equals the quantity demanded

39
Q

Equilibrium price

A

the price that balances the quantity supplied and the quantity demanded

40
Q

equilibrium quantity

A

the quantity supplied and the quantity demanded at the equilibrium price

41
Q

Surplus

A

a situation in which the quantity supplied is greater than the quantity demanded

42
Q

Shortage

A

a situation in which the quantity demanded is greater than the quantity supplied

43
Q

law of supply and demand

A

the claim that the price of any good adjusts to bring the quantity supplied and the quantity demand for that good into balance

44
Q

Elasticity

A

The measure of the responsiveness of quantity demanded or quantity supplied to a change in one of it’s determinants

45
Q

Price elasticity of demand

A

a measure of how much the quantity demanded of a good responds to a change in the price of that good,

46
Q

Price Elasticity of Demand =

A

% change in Q demanded / % change in Price

47
Q

Necessities have _____ demands

A

inelastic

48
Q

Luxuries have ______ demands

A

elastic

49
Q

Midpoint method equation

A

(P2-P1)/[(P2+P1)/2]

50
Q

Demand is considered inelastic when

A

Elasticity is less than 1

51
Q

Unit Elasticity is

A

when elasticity is exactly 1

52
Q

Demand is considered perfectly inelastic when

A

demand curve is vertical. zero elasticity. regardless of price, the quantity demanded stays the same.

53
Q

Demand is perfectly elastic when

A

demand curve is horizontal. Small changes in price lead to huge changes in quantity demanded

54
Q

Inelastic curves look like

A

the letter “I”

55
Q

Total revenue

A

the amount paid by buyers and received by sellers of a good, computed as Price x Quantity sold

56
Q

Slope =

A

Rise Change in P
——— = ——————
Run Change in Q

57
Q

Income elasticity of demand

A

a measure of how much the quantity demanded of a good responds to a change in consumer’ income

58
Q

Cross-price elasticity of demand

A

Measure of how much the quantity demanded of one good responds to change in the price of another good.

59
Q

Price Elasticity of supply

A

Measure of how much the quantity supplied of a good responds to change in price of that good

60
Q

Price Ceiling

A

Legal maximum on the price at which a good can be sold

61
Q

Price Floor

A

Legal minimum on the price at which a good can be sold

62
Q

If the equilibrium price is below the price ceiling, the price ceiling is

A

not binding

63
Q

Binding constraint is

A

when the equilibrium price is above the price ceiling.

64
Q

When the government imposes a binding constraint on a competitive market, a

A

shortage of the good arises. Sellers must ration scarce goods among a large # of potential buyers

65
Q

Tax incidence

A

the manner in which the burden of a tax is shared among participants in a market; buyers, sellers, producers..

66
Q

Monopoly

A

only one seller in the market. They set the price

67
Q

Market demand

A

sum of all individual demands for a good or service

68
Q

Market demand curve

A

sum of the individual demand curves, horizontally

69
Q

Increase in demand

A

Change that increases the quantity demanded at every price and shifts the demand curve to the right

70
Q

Decrease in demand

A

Change that decrease the quantity demanded at every price and shifts the demand curve to the left

71
Q

Market Supply

A

sum of the supplies of all sellers for a good or service

72
Q

Market supply curve

A

sum of individual supply curves, horizontally

73
Q

Increase in supply

A

change that increases the quantity supplied at every price and shifts supply curve to the right

74
Q

Decrease in supply

A

change that decreases the quantity supplied at every price and shifts the supply curve to the left

75
Q

Supply and demand together

A

determine the prices of the economy’s many goods and services

76
Q

Prices

A

Signals that guide the allocation of resources.
Mechanism for rationing scarce goods.
Determine who produces each good and amount produced.

77
Q

What does the price elasticity of demand measure

A

How much the quantity demanded responds to the change in price

78
Q

Demand is said to be elastic if buyers respond_____ to changes in _____.

A

Substantially

Price

79
Q

Demand is said to be inelastic if Q demanded changes only _____ when the _______ of the good changes

A

Slightly

Price

80
Q

T/F: The demand for flat screen monitors is more elastic than the demand for monitors in general

A

True

81
Q

T/F: The demand for grandfather clocks is more elastic than demand for clocks in general

A

True

82
Q

The demand for cardboard is more elastic over a long period than a short period

A

True

83
Q

Price elasticity of demand is computed as

A

the percentage change in the quantity demanded divided by the percentage change in price.

84
Q

How is Price elasticity of supply computed

A

% Change in Price

85
Q

How is cross-price elasticity of demand computed

A

% Change in P of 2nd Good

86
Q

How is income elasticity of demand computed

A

% Change in Income

Microeconomics (1 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions