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13 Cards in this Set
- Front
- Back
- 3rd side (hint)
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law of demand
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the inverse relationship between price and quantity demanded of a good or service, cetaris paribus
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the price of burritos in the caf goes up to $3. less and less people want to buy burritos
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demand curve
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a curve that depicts the relationship of price and quantity demanded. has a negative slope
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similar to production possibilities curves, and can move left to right.
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market demand
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the sum of all individual demands in a market
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the amount of coffee needed for all the starbucks in California, (not the ones in LA).
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market-day supply
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a market situation in which the quantity of a good supplied is fixed, regardless of the price
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the bakery makes 500 blueberry scones, daily. By 5:00 they have sold out. too bad i get out of work at 5:30.
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excess supply
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the difference at a particular price, between quantity demanded and quantity supplied, the latter being greater.
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my company always orders 30 blueberry scones from that one bakery and they all get eaten up, but today only 26 were eaten.
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equilibrium price
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the price that equates quantity demanded to quantity supplied. if any disturbance from that price occurs, excess demand or excess supply emerges to drive the price back to equilibrium.
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an extra shipment of blue scarves comes in. In order to make room for the season's new, red scarves, the store puts the blue scarves on sale, buy one get one free. same profit, get rid of them faster.
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excess demand
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the difference at a particular price, between quantity demanded and quantity supplied, the former being the greater
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now everyone wants a blue scarf, but because they store wanted to get rid of them (and they did) there aren't anymore blue scarves.
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short run
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the time interval during which suppliers are able to change the quantity of some but not all the resources they use to produce goods and services
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changing the brakes on 3 trucks that are currently in the station.
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long run
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the time interval during which suppliers are able to change the quantity of all the resources they use to produce goods and services
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changing the brakes on all the trucks because they could all use a tune-up
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supply curve
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a curve that depicts the relationship between price and quantity supplied
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an example of an economic model
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change in quantity demanded
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a change in the quantity demanded of a good that is caused solely by a change in the price of that good.
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SALES! low prices, everyone wants more
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change in supply
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a change in quantity supplied of a good that is caused by factors other than a change in the price of that good
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verizono doesn't make/sell Razors anymore because people (consumers) want touch screen phones instead
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change in quantity supplied
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a change in the quantity supplied of a good that is caused solely by a change in the price of that goo
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if no one wants red scarves, (change in quantity demanded), the company will stop making them.
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