Supply and Demand

Question 1

Law of Supply?

Answer 1

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

Question 2

Supply schedule?

Answer 2

• 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

Question 3

Supply Curve?

Answer 3

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

Question 4

Demand?

Answer 4

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

Question 5

Law of Demand?

Answer 5

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

Question 6

Demand schedule?

Answer 6

• 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

Question 7

Demand Curve?

Answer 7

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

Question 8

Equilibrium price

Answer 8

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

Question 9

When does market equilibrium occur?

Answer 9

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

Question 10

Surplus?

Answer 10

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

Question 11

Shortage?

Answer 11

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

Question 12

Price Ceilings?

Answer 12

• legal maximum price for a good or service

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

Question 13

Price floor?

Answer 13

• legal minimum price for a good or a service

* ex: minimum wage, tobacco products

Question 14

Price motivation?

Answer 14

•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

Question 15

Profit?

Answer 15

Marginal revenue, total revenue, and profit maximizing output

Question 16

Marginal revenue?

Answer 16

Money made from the sale of each additional unit of output

Question 17

Total revenue?

Answer 17

A company’s income from selling its products

Question 18

Profit maximizing output?

Answer 18

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

Question 19

Production cost?

Answer 19

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

Question 20

Fixed cost?

Answer 20

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

Question 21

Variable cost?

Answer 21

Cost dependent upon the level of production output

Question 22

Total costs?

Answer 22

Sum of the fixed and variable costs

Question 23

Marginal cost?

Answer 23

Extra cost of producing one more unit

Question 24

Marginal product?

Answer 24

Change in total output brought about by adding one more worker

Question 25

Increasing returns?

Answer 25

Occurs when hiring workers causes marginal product to rise

Question 26

Diminishing revenue?

Answer 26

Uccurs when hiring workers causes marginal product to lower

Question 27

What are factors that affect demand?

Answer 27

* willingness to pay * ability to pay * market size * consumer taste * consumer expectations * substitutes * complements

Question 28

Substitutes?

Answer 28

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

Question 29

Complements?

Answer 29

Products used together

Question 30

What are factors that affect supply?

Answer 30

* input costs * labor productivity * technology * government action * producer expectations * number of producers

Question 31

Government action?

Answer 31

Taxes, regulation, etc...

Question 32

What does surplus indicate?

Answer 32

Prices are too high

Question 33

What does shortage indicate?

Answer 33

Prices are too low

Question 34

Total profit?

Answer 34

All the profits made from all revenue

Question 35

Regulations?

Answer 35

Rules that you have to work withen

Question 36

What do lower prices encourage?

Answer 36

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

Question 37

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

Answer 37

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

Question 38

How does a business calculate total profit?

Answer 38

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

Question 39

What motivates producers to increase supply?

Answer 39

When the demand for their product goes up

Question 40

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

Answer 40

It will push to a higher price

Question 41

Supply?

Answer 41

The willingness and ability of producers to offer goods and services

Question 42

Change in quantity demanded

Answer 42

* 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

Question 43

Change in quantity supply

Answer 43

* 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

Question 44

Change in demand

Answer 44

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

Question 45

Change in supply

Answer 45

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

Question 46

What is change in quantity?

Answer 46

It is where the quantity changes but the price does not

Question 47

What is change in supply?

Answer 47

When there is change in quantity and price