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49 Cards in this Set
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Rule stating that more will be demanded at lower prices and less at higher prices; an inverse relationship between price and quantity demanded. |
Law of Demand |
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The beach economic theory that deals with behavior and decision making by small units such as individuals and firms. |
Microeconomics |
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When the price of something increases, the quantity demanded _______. |
Decreases |
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The movement along the demand curve showing that a different quantity is purchased in response to a change in price. |
Change in quantity demand |
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The portion of a change in quantity demanded caused by a change in a consumer's income when the price of a product changes. |
Income effect |
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Different amounts demanded at every price, causing the demand curve to shift to the left or the right. |
Change in demand |
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Products related in such a way that an increase the price of one increases the demand for another. |
Substitutes |
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Products related in such way that an increase in the price of one reduces the demand for the other. |
Complements |
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What is the MAIN cause of a change in quantity demanded? |
Change in price |
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What is the relationship between income and demand? |
An increase in income increase demand. |
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Which of the following replaces a costly item with a less costly one? |
The substation effect |
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Which is likely complement to a tablet computer? |
Apps |
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What factors create a change in demand? |
Consumer Income Consumer Tastes Substitutes Complements Expectations Number of consumers |
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Price of common vegetables tend to be elastic. Why? |
Because other vegetables are available |
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Which term refers to a changing price that causes a proportional change in total revenue? |
Unit elastic |
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The extent to which a change in price causes a change in the quantity demanded. |
Demand elasticity |
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Which product most likely has demand that is inelastic? |
A vital medicine |
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Case of Demand elasticity where the percentage change in the independent variable causes a less than proportionate change in the dependent variable. |
Inelastic |
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Type of elasticity in which a change in the independent variable results in a larger change in the dependent variable. |
Unit elastic |
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What factors determine a product's demand elasticity? |
Can need be delayed Are substitutes available Purchase a large portion of income |
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What type of Demand would there be for a good that had NO substitutes? |
Inelastic |
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What type of Demand would there be for a good that your business needs right now. |
Inelastic |
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Refers to the amount of a product offered for sale at all possible prices in a market. |
Supply |
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The quantity supplied increase when the price... |
Increase |
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A graph that shows the quantities supplied at each and every possible price in the ____________ is called a supply curve. |
The market |
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The movement along the supply curve measures a change in ________ supplied. |
Quantity |
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A(n) _________ is a payment to an individual, business, or other group to encourage or protect a certain type of economic activity. |
Subsidy |
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Which of these BEST describes the influence of high prices on the behavior of producers? |
They are an incentive for producers to produce more. |
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Which of these names the way in which producers regard taxes? |
As part of the cost of production |
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What are the factors that can cause a change in supply? |
Cost of resources Technology Subsidies Number of sellers Productivity Taxes Government regulations Expectations |
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The stages of production are distinguished by their marginal products. |
True |
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The stages of production measure effects of workforce size on marginal product. |
True |
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Labor I'm a factory is an example of which of these? |
A variable factor of production |
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Why don't economists consider the effect of changes to technology when focusing on the short run? |
Sense the shorter. Is such a limited time span the only thing that has time to change is labor |
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Which terms describe costs that are incurred regardless of a firm's rate of production. |
Fixed costs and overhead |
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Which of these is an example of a fixed cost? |
Depreciation of capital goods |
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Which of these is an example of a variable cost? |
Raw materials |
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The monetary value of an object |
Price |
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Prices help the economy function by simplifying the __________ of resources |
Allocation |
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A particular price on an item might provide a(n) __________ for a change in economic behavior by a buyer or seller. |
Incentive |
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This is a method by which the government allocates goods and services without prices. |
Rationing |
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Which of these BEST describes prices in a market economy? |
A set of compromises between buyers and sellers |
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Why does an increase in has prices lead to less consumer spending on other items? |
The demand of gas is largely inelastic |
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The amount at which demand for an item matches the supply of it. |
Equilibrium quantity |
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The cost of an item when the amount purchased matches the amount produced. |
Equilibrium price |
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When the quantity demanded of an item is greater than the quantity supplied at a given price. |
Shortage |
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When the quantity supplied of an item is greater than the quantity demanded at given price. |
Surplus |
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Which of these tends to force the price of an item downward? |
A surplus of that item |
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Which of these tends to force the price of an item upward? |
A shortage of that item |
