Unit 2 Flashcards
1
Q
What is supply
A
How much we have
2
Q
Law of supply?
A
Direct relationship between price and quantity
(price goes up, businesses make more & reverse)
3
Q
When price changes
A
move up or down supply curve
4
Q
When something else changes
A
Supply curve shifts
5
Q
What is demand
A
What the people want
6
Q
Law of demand?
A
Inverse relationship between price & quantity. When price goes up people buy less, and reverse
7
Q
Goods impacted by Supply:
A
- Input costs
- Related goods
- shocks
-tariffs
-corporate taxes
8
Q
Good impacted by demand:
A
- substitute goods
-complementary goods
-tasted
-internet
-income taxes
-interest rates
9
Q
What’s a surplus?
A
Price too high? big supply!
10
Q
What’s a shortage?
A
Price too low? Demand will go (up)!
11
Q
What are elastic goods?
A
Goods with lots of substitutes, if price changes people can buy different goods
12
Q
What are inelastic goods?
A
Goods with no substitutes, like gas
