Understanding Graphs Flashcards

1
Q

Positive (direct) Relationship

A

When an INCREASE in on variable results in an INCREASE in the value of the other variable.

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2
Q

Negative (inverse) Relationship

A

INCREASE in one variable results in a DECREASE in the other variable

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3
Q

Dependent variables are denoted by the

A

Y axis

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4
Q

Nonprice Factors influencing Demand

T, I, F, N

A
  1. Taste and preferences
  2. Income
  3. Future Expectations of Price
  4. Number of Consumers
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5
Q

Normal (direct) Good is a good for which consumers have

A

A Greater demand as their income increases,

A Smaller demand as income decreases

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6
Q

Inferior (inverse) Good is a good for which consumers have

A

A Smaller demand as their income Increases

A Greater demand as their income Decreases

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7
Q

Substitute good

A

If an INCREASE in price of good Y causes consumers to INCREASE demand for good X and visa versa

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8
Q

Complimentary Good

A

If INCREASE in price of Good Y causes consumers to DECREASE demand for good X and visa versa

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9
Q

Qxd is Quantity demanded of good X

The function for determining Qxd =

A

f(Px, T, I ,Py, Pz, EXC, NC,…)

Px = Price of good X
T = Tastes and preferences
I = Income
Py, Pz = Price of competitors goods
EXC = Consumer expectation of future price
NC = Number of consumers
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10
Q

Market Demand Function shows

A

the quantity demanded of the good or service by all consumers in the market at any given price

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11
Q

Market Demand function is influenced by these 4

A
  1. Prices of related goods
  2. Tastes and preferences
  3. Income
  4. Future Expectations
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12
Q

Non-price Factors Influencing Supply

S, I, P, F, N

A
  1. State of Technology (knowledge of combining inputs to lower costs)
  2. Input prices
  3. Prices of goods related in Production (increased demand in white mean means increased production of dark meat)
  4. Future Expectations
  5. Number of producers
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13
Q

Qxs is the supply function for a quantity supplied of good X and the function for determining Qxs is

A

f(Px, TX, P1, Pa, Pb, EXP, NP, …)

Px = Price of good X
Tx = State of Technology
P1 = Prices of inputs
Pa, Pb = Prices of goods A and B which are related in production of good X
EXP = producer expectations about future prices
NP = Number of producers

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14
Q

Individual supply function shows

A

the variables that influence an individuals producers supply of a product

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15
Q

Market supply function shows

A

The variables that influence the overall supply of a product by all producers (affected by number of producers in the market)

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16
Q

Upward slopes in a supply curve show

A

positive or direct relationships between price of product and quantity of producers willing to supply

17
Q

Development of new technology causes a/an _____ in supply

A

Increase, (or rightward shift)

This is because technology lowers the cost of production

18
Q

DECREASE of price of any inputs causes a/an ____ in supply

A

Increase, (or rightward shift)

This is because it lowers the cost of production

19
Q

INCREASE of a substitute good causes a/an ____ in supply

A

Decrease (or leftward shift)

20
Q

INCREASE of a complementary good causes a/an _____ in supply

A

Increase in supply (or rightward shift)

21
Q

Producers expectations of a LOWER price results in a/an ____ in supply

A

Increase (or rightward shift)

22
Q

Producers expectations of a HIGHER price results in a/an ____ in supply

A

Decrease (or leftward shift)

23
Q

An INCREASE in the number of producers results in a/an _____ in supply

A

Increase (or rightward shift)

24
Q

Any change in the number of producers in the market is represented by

A

a shift of the entire curve

25
Q

Equilibrium price

A

Price that will actually exist in the market determine by when the quantity demanded equals the quantity supplied by producers

26
Q

Equilibrium quantity

A

Where the amount of output that consumers demand is equal to the amount that producers want to supply