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PAP Hill Economics And Choice > Supply and Demand > Flashcards

Supply and Demand Flashcards

1
Q

Law of Supply?

A
  • price decreases, supply decreases
  • price increases, supply increases
  • hint: they move in the Same direction
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2
Q

Supply schedule?

A
  • list how much of a good or service a producer is willing to offer at each price
  • market supply schedule list how much producers are willing to offer
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3
Q

Supply Curve?

A

•Graphic that displays data from supply schedule
•Market supply curve displays data from market and supply schedule
• S= supply
Same
Up

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4
Q

Demand?

A

The willingness to buy a good or a service AND the ability to pay for it

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5
Q

Law of Demand?

A
  • price decreases, demand increases
  • price increases, demand decreases
  • hint: they move in Different directions
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6
Q

Demand schedule?

A
  • list of how much an INDIVIDUAL is willing to purchase at every price
  • market schedule shows how ALL customers are willing to purchase at each price
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7
Q

Demand Curve?

A

•Graphic that displays data from demand schedule
•market demand curve displays data from the market demand schedule
• D=demand
Different
Down

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8
Q

Equilibrium price

A

Is the price at which the individual quantity demanded and individual quantity supplied are equal

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9
Q

When does market equilibrium occur?

A

When all quantity demanded from customers equals the quantity supplied from all producers

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10
Q

Surplus?

A

•results when the quantity supplied is greater than the quantity demanded

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11
Q

Shortage?

A

•Results when the quantity demanded is greater than the quantity supplied

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12
Q

Price Ceilings?

A
  • legal maximum price for a good or service

* ex: tickets to concert or sporting event, gasoline prices each day

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13
Q

Price floor?

A
  • legal minimum price for a good or a service

* ex: minimum wage, tobacco products

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14
Q

Price motivation?

A 
•consumers want to buy at low prices
•producers want to sell at high prices 
•incentives are ways to encourage people to take certain actions
      -sales and discounts
      -BOGO: buy one get one
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15
Q

Profit?

A

Marginal revenue, total revenue, and profit maximizing output

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16
Q

Marginal revenue?

A

Money made from the sale of each additional unit of output

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17
Q

Total revenue?

A

A company’s income from selling its products

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18
Q

Profit maximizing output?

A

Level of production in which a business realizes its greatest amount of profit

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19
Q

Production cost?

A

Fixed costs, variable cost, total cost, and marginal cost.

20
Q

Fixed cost?

A

Cost that the owner incurs no matter how much the my produce

21
Q

Variable cost?

A

Cost dependent upon the level of production output

22
Q

Total costs?

A

Sum of the fixed and variable costs

23
Q

Marginal cost?

A

Extra cost of producing one more unit

24
Q

Marginal product?

A

Change in total output brought about by adding one more worker

25
Q

Increasing returns?

A

Occurs when hiring workers causes marginal product to rise

26
Q

Diminishing revenue?

A

Uccurs when hiring workers causes marginal product to lower

27
Q

What are factors that affect demand?

A
  • willingness to pay
  • ability to pay
  • market size
  • consumer taste
  • consumer expectations
  • substitutes
  • complements
28
Q

Substitutes?

A

Products used in place of other products to satisfy needs or wants

29
Q

Complements?

A

Products used together

30
Q

What are factors that affect supply?

A
  • input costs
  • labor productivity
  • technology
  • government action
  • producer expectations
  • number of producers
31
Q

Government action?

A

Taxes, regulation, etc…

32
Q

What does surplus indicate?

A

Prices are too high

33
Q

What does shortage indicate?

A

Prices are too low

34
Q

Total profit?

A

All the profits made from all revenue

35
Q

Regulations?

A

Rules that you have to work withen

36
Q

What do lower prices encourage?

A

It encourages the customers to purchase a business products at low prices

37
Q

How do business owners decide on the right number of workers?

A

They look at the marginal production, And then the increasing and diminishing returns

38
Q

How does a business calculate total profit?

A

The review their fixed, variable, total, and marginal cost

39
Q

What motivates producers to increase supply?

A

When the demand for their product goes up

40
Q

When customers demand more goods and services at every price what will happen to the equilibrium

A

It will push to a higher price

41
Q

Supply?

A

The willingness and ability of producers to offer goods and services

42
Q

Change in quantity demanded

A
  • an increase or decrease in the amount demanded because of change in price
  • change refers to change along the curve itself
  • each point represents a new quantity demanded
  • DOES NOT SHIFT THE DEMAND CUVE ITSELF
43
Q

Change in quantity supply

A
  • an increase in the amount supplied because of a change in price
  • change refers to movement along the curve itself
  • each point represents a new quantity supplied
  • DOES NOT SHIFT THE SUPPLY CURVE ITSELF
44
Q

Change in demand

A
  • something prompts customers to but different amounts at every price
  • CREATES A SHIFT IN THE DEMAND CURVE
45
Q

Change in supply

A
  • something prompts producers to sell different amounts at every price
  • CAUSES A SHIFT IN THE SUPPLY CURVE
46
Q

What is change in quantity?

A

It is where the quantity changes but the price does not

47
Q

What is change in supply?

A

When there is change in quantity and price

PAP Hill Economics And Choice (8 decks)

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