Unit 2 - S&D model - part 1 Flashcards
Q1
S和D的变化的答题套路
- 定角度，when Q stays unchanged 或者 P stays unchanged
- 分析情况会导致另外一个变量怎么变
- 因此线是 shift down/up；或者shift to the left/right
- 小尾巴, all else equal
Q2
S和D的变化的答题套路练习：
If tax on producer impact
- 定角度。例如 when quantity supplied stays unchanged,
- With tax, producers have to pay extra money to the government. This is equivalent to higher cost. Therefore producers have to charge a higher price.
- As a result, the supply curve shifts up (S往上移动）
- , all else equal
Q3
决定Supply的”变量“是什么
Cost and productivity
Q4
how to explain that the supply curve is upward sloping?
- Quantity supplied ↑ ➪ Productivity ↓ ，Extra unit cost ↑ ➪ Price charged ↑
Q5. 价格 Price
- 对于consumer来说，price是什么
- 对于producer来说，price是什么
- price willing to pay / willingness to pay
- price charged
Q6. How to explain that the demand curve is downward sloping?
Quantity demanded ↑ ➪ Extra satisfaction ↓ ➪ Willingness to pay ↓
Q7. What are the difference between the following
- quantity demanded increases
- Demand increases
- movement downwards along the demand curve
- the demand curve shifts up or the right
Q8. What are the difference between the following
- quantity supplied increases
- Supply increases
- movement upwards along the supply curve
- the supply curve shifts up or the right
Q9.
Definition:
The market demand refers to….
the sum of all individual demand for a product.
Q10. Definition:
Demand refers to ….
the willingness and the ability of customers to pay a given price to buy a good or service.
Q11. Definition:
Quantity demanded refers to
the amount of a good or service demanded at each price level
Q12. Definition:
The law of demand states there is an ________ relationship between the _______________ and the __________.
The higher the price of a product, the lower its demand tends to be
inverse; price of a good or service; quantity demanded
Q13. the demand curve is downward sloping because people have different taste and preference
a. true
b. false
b. false.
The demand curve is downward sloping because the extra satisfaction people get, hence the price they are willing to pay, decreases with quantity consumed
People will have different demand curves because of different taste
Q14. If there is an increase in quantity demanded in burgers
- Has people’s income risen?
- what drives the increase in quantity demanded?
- No. Factors other than price willing to paid are constant along the same demand curve
- The price of burgers
Q15 使得demand curve shifts的几个因素，缩写是什么？这些缩写具体都是什么？
HIS AGE
- Habits, tastes and fashions.
- income levels
- Substitutes and complements (price and availability).
- advertising
- policy
- economy
Q16 Definition：
Supply refers to ….
the ability and willingness of firms to provide goods and services at given price levels.
Q17 Definition:
Quantity supplied refers to….
the amount of a good or service supplied at each price level
Q18 Definition:
The market supply refers to ….
the sum of all individual supply for a product.
Q19 Definition:
The law of supply says there is a _______ relationship between __________________
The higher the price of a product, the higher its supply tends to be
positive;
price and the quantity supplied of a product
Q20. If there is an increase in quantity supplied in cell phones
- Has people’s income risen?
- Are there new entrants in the cell phone market?
- Is there a new iPhone being released?
- Input prices have not changed. Factors other than production costs hence price charged are constant along the same supply curve
- No. Factors other than production costs hence price charged are constant along the same supply curve
- No. Factors other than production costs hence price charged are constant along the same supply curve
Q21. If there is an increase in quantity supplied in cell phones
- has input price increased?
- has production costs increased?
- what drives the increase in quantity supplied?
- no. Input prices have not changed. Factors other than production costs hence price charged are constant along the same supply curve
- Yes. 注意，我们说 production cost随着Qs ↑ ，也越来越高，原因是lower efficiency（而不是input原材料的价格上涨了）。
- Price charged
Q22 What are the factors deteriming supply?
TWO TIPS + JOINT supply
- Time
- Weather
- Opportunity cost of production options (price of other goods)
- Taxes
- Innovations
- Production costs
- Subsidies
- Joint supply
- supply refers to the ____________ and ______________ to ______ a product
supply refers to the willingness and ability to sell a product
- supply shortage is____________________
demand > supply
- excess demand is
demand > supply
- Qs increases, __________________ will worsen, so that ___________ will increase.
As a result, producers have to charge a ___________________ price
Qs increases, ___productivity___ will worsen, so that ____per unit cost_______ will increase.
As a result, producers have to charge a __________higher_________ price
- Law of supply 说的是_____________
Qs 与 price charged 呈正比的关系
- Law of demand 说的是
Qd 与 price willing to pay are inversely related
- subsidy是_______________. Subsidy will ______ production cost, causing supply curve to _______
a payment made by the government to encourage the production and consumption of a product;
lower;
shift to the right (or shift down)
- indirect tax 会让供应成本_____________，supply curve will____________
indirect tax会让供应成本增加，supply curve will shift to the left
- higher income tax will _____________ income, causing d_emand / supply_ to shift to the left / right
reduce people’s income. Causing demand curve to shift to the left
- Macroeconomics is the study of __________________________.
economic behaviour and decision making of the whole economy, rather than individual markets
- Microeconomics is the study of ____________
particular markets and sections of the economy, rather than the economy as a whole.
37. Quantity demanded ↑ ➪ Extra satisfaction _____________ ➪ Willingness to pay ____________
Quantity demanded ↑ ➪ Extra satisfaction ↓ ➪ Willingness to pay ↓
- Substitute 是
If the price of one product falls, then it is likely the demand for its substitute will_______________
- Substitutes are goods or services that can be used instead of each other, such as Coca-Cola or Pepsi and tea or coffee
If the price of one product falls, then it is likely the demand for its substitute will FALL
- Complement 是
If the price of one product increases, then the demand for its complement is likely to ______________-
- Complements are products that are jointly demanded, such as cinema movies and popcorn, or mobile phones and phone cases.
- If the price of one product increases, then the demand for its complement is likely to fall.
- if people expect car price to rise in the future, their Supply / Demand will increase / decrease now
Graphically:
if people expect car price to rise in the future, their Demand will increase now
Graphically: demand curve shifts to the right
- Market Equilibrium is reached when….
Market is in equilibrium when the market price and market traded quantity have no tendency to change.
This occurs when the demand for a product is equal to the supply of the product, so there is no excess demand (shortage) or excess supply (surplus)
If the market price is below Pe, then there is an excess demand, driving up the market price.
If the market price is above Pe, then there is an excess supply, driving down the market price.
- a shortage of labour will_____________ labour price;
Producers that use labour for input will see production cost to ____________; their supply curve will_____________
drives up labour price (wages);
cause production cost to increase;
the supply curve to shift to the left
- Labour and _________________ are substitute
capital
- 如果有一部机器，一定要师傅来操作，机器和师傅的关系是
complement
- if price of pepsi ↑ , Demand/supply of coca cola will ________
demand for coca cola will increase
- if price of aluminium ↑ , supply/demand** for pepsi will **increase/decrease
Cost of production ↑ , supply curve will decrease
- indirect tax will _______________________________
raise cost of production, Supply shifts to the left
- direct tax will
reduce income, reduce demand, cause demand curve to shift to the left
- supply curve shifts to the left = supply ________
decrease
- cost ↑ , supply __________-
supply ↓ (supply curve shiftrs to the left, when price stayst the same; OR we say supply curve shifts down, when Qs stays the same)
- 一个机器，要不印刷报纸，要不印刷杂志。那么 opportunity cost of printing magazines is _____________;
If the price of newspaper goes up, printing magaine becomes _____________, therefore the supply of magazine will____________
一个机器，要不印刷报纸，要不印刷杂志。那么 opportunity cost of printing magazines is _ The gains forgone in printing newspaper____________;
If the price of newspaper goes up, printing magaine becomes ____relatively more costly (in opportunity cost)_________, therefore the supply of magazine will_____decline, even if price of magazine stays unchanged_______
- income ↑ , demand/supply ______
demand ↑ ,
the demand curve shifts to the right, even if price paid stays unchanged
- Supply 的关键词是
COST and PRODUCTIVITY
- Opportunity cost的关键词是
Forgone / Tradeoff / 牺牲
- Direct tax影响_____________;
indirect tax 影响_______________________
income hence demand;
cost hence supply
- subsidy 怎么从 supply curve中看出
两条curve 的垂直距离
- labour shortage will_____________
labour shorage = excess demand in the labour market, this will
raise labour price; cause firm’s production cost to increase, a good’s supply curve shifts to the left
- market shortage is excess ______
demand
- market surplus is excess _________
supply
- excess supply is market ________
surplus
- excess demand is market __________
shortage
