Unit 4 Flashcards
pertains to the quantity of goods or services that people are ready to buy at a given time, price, and place.
Demand
It states that if a price goes up, the quantity demanded will go down. Conversely, if the price goes down, the quantity demanded will go up.
Law of Demand
a table that shows the quantity demanded of a good or service at different price levels.
DEMAND SCHEDULE
the graphical representation showing the relationship between price and quantities demanded per period.
DEMAND CURVE
A demand curve has a negative slope; thus, it slopes _____
downward from left to right.
The downward slope indicates the _______ relationship between price and quantity demanded.
inverse
If the demand curve shifts to the right, it means the demand ________;
if it shifts to the left, the demand _______.
right - increases
left - decreases
Formula for Quantity Demand
QD= a-bP
Formula of QD - Parts
QD= a-bP
QD- Quantity Demanded – Dependent Variable
P- Price - Independent variable
a- Intercept - Given
b- Slope - Given
QD is missing
QD = a-bP
Price is missing
P = a-QD/b
FACTORS CAN CAUSE THE DEMAND CURVE TO SHIFT TO THE RIGHT OR SHIFT TO THE LEFT
- Taste/Preferences
- Changing Incomes
- Population Change
- Substitute Goods
- Complimentary Goods
- Price Expectations
The demand for goods and services increases when people like or prefer them. Such taste/preferences are greatly influenced by trends, fashion, and advertisements
- Taste/Preferences
Increasing incomes of households raise the demand for specific goods or services. Usually, people buy more goods when their income increases.
o Normal Goods
o Inferior Goods
- Changing Incomes
an increasing population leads to an increase in the demand for goods or services.
- Population Change
are goods that are interchanged with another good; are generally offered at a lower price, which makes it more attractive for buyers.
- Substitute Goods
these are the goods that you cannot consume without the other goods.
- Complimentary Goods
if buyers expect the price of a good or service to rise (or fall) in the future, it may cause the current demand to increase (or decrease).
- Price Expectations
pertains to the quantity of goods or services that firms are ready and willing to sell at a given time, price, and place.
Supply
If Demand is the consumer’s willingness to ________;
Supply is the willingness of suppliers or producers to _________ goods or services at a given price.
consume
produce or sell
which states that if the price of a good or service goes up, the quantity supplied for such good or service will also go up; if the price goes down, the quantity supplied also goes down.
LAW OF SUPPLY
a graphical representation showing the relationship between the price of the product or factor of production and the quantity supplied per period.
SUPPLY CURVE
The upward slope shows the _______ relationship between the price and quantity.
positive
In Supply Curve Shift, if it shifts to the right, the supply _______, and if it shifts to the left, the supply _______.
increases
decreases
