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Intro to economics > Supply and demand > Flashcards

Supply and demand Flashcards

1
Q

What is demand?

A

A concept ; what people buy at a certain time and price

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2
Q

What is the quantity demanded?

A

Quantity demanded: numerical demands at different prices

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3
Q

What does the law of demand stipulate?

A

As the price increases, the Qd decreases
As the price decreases, the Qd increases

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4
Q

What does a demand curve shift mean?

A

A demand shift

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5
Q

What are the demand shifters?

A
  • number of demanders
  • availability of substitutes
  • availability of complemtary products
  • fads; tastes and preferences
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6
Q

What is supply?

A

Concept: what producers sell at a certain time and price

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7
Q

What is Qs?

A

Quantity supplied: numerical representation of supply
Number value of supply at each price

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8
Q

What are the supply shifters?

A
  • The number of suppliers
  • Cost of inputs
  • Technology
  • Expectations, speculation of the market
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9
Q

What is the equilibrium?

A
  • when Qd=Qs=Qe
  • “market clearing”
  • Only present once on a marjet graph
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10
Q

What is a surplus and how do you fix it ?

A

When Qs > Qd

The price has to decrease

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11
Q

What is a shortage and how do you fix it?

A

When Qs < Qd

The price has to increase

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12
Q

What happens when the demand increases?

A

Pe increases
Qe increases

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13
Q

What happens when the demand decreases?

A

Pe decreases
Qe decreases

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14
Q

What happens when the supply increases?

A

Pe decreases
Qe increases

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15
Q

What happens when the supply increases?

A

Pe decreases
Qe increases

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16
Q

What does the law of supply stipulate?

A

As price rises, the Qs rises, whereas when the price decreases, the Qs decreases. This is about making profit: price went up, produce more, more money. POV OF SUPPLIER. All based as profit

17
Q

What happens when both supply and demand increase at the same time?

A
  • Qe increases
  • Pe stays the same
  • No effect on consumer
18
Q

What happens when both demand and supply decrease at the same time?

A
  • Qe decreases
  • Pe stays the same
19
Q

What happens when demand increases but supply decreases?

A

Hyperinflation:
- Qe stays the same
- Pe increases a lot

20
Q

What happens when supply increases but demand decreases?

A

Negative inflation:
- The Qe stays the same
- Pe decreases a lot

Intro to economics (3 decks)

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