Unit 2 Chapter 3 Flashcards
A graph, which is correct.
when ONE rock concert costs $125, this individual goes to up to FIVE per year
Which of the following refers to consumers buying other goods when the price of the good in question rises?
The substitution effect.
when analyzing the relationship between the price of a good and quantity demanded, other variables must be held constant. Which term BEST describes such an assumption
the term ceteris paribus
Graph. Increase in income….
the arrow moving forward so the graph on the left
increase in the price of a COMPLEMENT GOOD
graph on right where arrow moves to the left
change in something toher than the price of concert tickets affects market demand
A move from A to C
which of the following defines a supply curve?
a curve that shows the relationship between the price of a product and the quantity of the product supplied
which of the following best described the LAW OF SUPPLY
an increase in price causes an increase in the quantity supplied, and a decrease in price cause decrease in the quantity supplied.
The graphs depict the supply of rock concerts in the US. Which graphs best describes the impact of an increase in the price of an INPUT
one of the materials has risen so supply is going to decrease… to the LEFT!
Which of the graphs best describes the impact of an incrwase in the expected future price of conecert tickets?
if concert prices increase, sales will decrease. so graph on the left
refer to the graph below. Which of the following moves best describes a change in supply
quantity has increased to across the board (b to c)
what is the impact of higher population and income growth on equilibrium in the graph?
a higher equilibrium price and higher equilibrium quantity. EVERYONE MAKES MULLLLAA
What happens when the price of the ticket equals $125
There is a SURPLUS of 3 thousand tickets
If the magnitude of an increase in supply is greater than the magnitude of an increase in demand, what happens to equilbrium price and quantity in the market.
equilibrium price will fall and quantity will rise.
if the magnitude of an increase in demand is greater than the magnitude of an increase in supply, what happens to equilibrium price and quantity in the market?
equilibrium price will rise and quantity will rise
Chips and salsa are complements. If the price of salsa decreases, the demand for chips will increase.
True
If consumers believe the price of iPads will decrease in the future, this will cause the demand for iPads to decrease now
True
a change in supply is represented by a shift of the supply curve
True
An increase in the quantity of a product supplied is cause by an increase in the price of the product
True
Scarcity is defined as the situation that exists when the quantity demanded for a good is greater than the quantity supplied
False
Market equilibrium occurs where supply equals demand
False
If the demand curve for a product shifts to the left and the supply curve for the product shifts to the left, the equilibrium quantity will decrease
True
If the demand for product increases and the supply of the same product increase, the equilibrium price will increase
False
What is the law of supply? What does this law imply about the shape of the supply curve?
the law of supply states that, holding everything else constant, an increase in price causes an increase in quantity supplied. The positive relationship between price and quantity supplied gives rise to an upward-sloping supply curve.
What is the ceteris paribus condition?
the ceteris paribus condition is the requirement that when analyzing the relationship between 2 variables, such as price and quantity demanded, other variables must be held CONSTANT
For each of the following pairs of products state which are complements, which are substitutes, and which are unrelated. a-digital camera and memory stick b-7up and mountain dew c-swimsuits and flip-flops d-tylenol and cat food e-photocopier and paper
a-compliments b-sub c-compliments d-unrelated e-compliments
Indiciate whether each of the following situation would shift the supply curve to the left, to the right, or not at all.
an increase in the price of an input
an increase in productivity
an increase in the price of a sub. in produce.
a decrease in the expected future price of a product
a decrease in the current price of product
left right left right no shit
what are the two effects that explain the Law of Demand? Briefly explain each effect.
the two effects that explain the LAw of Demand are the income effect and the substitution effect. The income effect is the change in quantity demanded of a good that results from a change in purchasing power due to a change in the good’s price. The substitoin effect is the change in quantity demanded of a good that results from the effect of a change in the food’s price making the food more or less expensive relative to other goods that are substitutes.
price decreases
quantity may increase of decrease
quantity decreases
price may increase or decrease
price increases
quant. may increase or decrease
price decreases
quantity decreases
price increases
quantity may increase or decrease
