Quiz 2 Chapter 4 And 5 Flashcards
1
Q
Demand shift?
A
When other factors cause demand to decrease
2
Q
Movements along the demand curve?
A
Price falls and higher quantity is demanded or price rises and lower quantity demanded
3
Q
Shift factors of demand?
A
- Society’s income
- The prices of other goods
- Tastes
- Expectations
- Taxes and subsidies
4
Q
A market demand curve?
A
The sum of the individual demand curves horizontally
5
Q
Law of supply ?
A
Quantity supplied rises as price rises other things constant
Quantity supplied falls as price falls
6
Q
Fallacy of composition
A
Assumption that What is true for a part is also true for the whole
7
Q
Law of supply based on?
A
- At higher prices existing suppliers supply more
2. At higher prices new suppliers enter the market
