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18 Cards in this Set
- Front
- Back
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What is a shift in supply
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A profound occasion that causes suppliers to alter their production schedules
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What is a shift in demand
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a profound occasion that causes consumers to alter their consumption schedules
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What are price controls
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Government interventions that are used to control private markets
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What is a price ceiling
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Price control that seeks to impact maximum price on a service/good/factor that is below market-clearing or equilibrium price
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What is a price floor
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Price control that seeks to impede rimming price on a service/good/factor and discourage certain actions
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What do price ceilings to to the economy
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Causes a imbalance in the economy causing a shortage of the item
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What do price floors do to the economy
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Creates a surplus in a market because there is more supply than demand
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What is utility
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Refers to the satisfactions that is felt by consumers when a product is purchased or a certain choice is made
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What are details of utility
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It is subjective, it is not easily measured, it != usefulness
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What is total utility
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Refers to the utility or satisfactions experienced as more choices are made or as more of a product is consumed
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How is price elasticity calculated
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%in quantity demands over %price per unit
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what is price elasticity considered if it is less than negative one
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elastic
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What is price elasticity considered if it is equal to one
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unit elastic
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What is price elasticity considered if it is greater than one
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inelastic
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What is the rule of thumb for price if price elasticity is elastic
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more revenue is generated by products when prices are lowered
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what is the rule of thumb for price if price elasticity is unit elastic
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No change in revenue will occur when prices are lowered
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What is the rule of thumb for price if price elasticity is inelastic
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Less revenue is generated when prices are lowered
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What is an equilibrium
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where the supply curve and demand curve intersect, the optimal point for sale
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