Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
24 Cards in this Set
- Front
- Back
|
Competitive market. |
A market consisting of many buyers and sellers Buyers: consumers, demand Sellers: Producers, Supply |
|
|
Law of demand. |
As the price rises quantity demand (QD) will fall also as price falls QD will rise. (inversely related/ negative slope) |
|
|
Movement along the demand curve. |
Price is the only variable that can cause movement |
|
|
Factors that cause the demand curve to shift. |
1) Change in income- increase in our income (normal, increase)(inferior, decrease) 2) Changes in taste and preferences 3)Changes in prices of related goods-substituts and complements 4) Change in expectations 5) change in the number of consumers |
|
|
Normal |
Car, home |
|
|
inferior goods |
mac & cheese, Ramon |
|
|
Market equilibrium. |
Occurs when Quantity demand equals quantity supply with no surplus or shortage |
|
|
Law of supply. |
As prices rise so will the quantity supply. as price is lowered so will the quantity supply |
|
|
factors that cause the supply curve to shift. |
1) the number of the producers in the market 2) Changes in expectations 3) Changes in input images 4) Changes un technology-more tech more suply 5)Changes in the price of related goods (corn-major) |
|
|
equilibrium Price and Quantity when there is an increase in demand. |
Price goes up and quantity goes up |
|
|
Price and Quantity when there is a decrease in supply. |
Price will go up but quantity will go down |
|
|
Price and Quantity when there are simultaneous shifts in supply and demand. |
Decrease demand, increase in supply Q- indeterminant price goes down. Both supply and demand increase P-ineterninate quantity increases |
|
|
Price ceiling |
a Maximum price seller are allowed to charge for a good or service |
|
|
Price floor |
a minimum price buyers are required to pay for a good or service |
|
|
Opportunity Cost |
All costs (monetary and non-monetary) * what you give up to do something else
|
|
|
Macro
|
Looks at the overall ups and downs in the economy
|
|
|
Micro
|
Decisions made by individual consumers, business and the gout
|
|
|
Positive
|
Fact-based that can be tested |
|
|
Normative |
Based on opinion
|
|
|
Recessions. |
Periods of economic downturn when employment and output are falling
|
|
|
Inflation |
Overall "level" of prices rise
|
|
|
Deflation
|
Overall "level" of price fall
|
|
|
Price stability. |
When the overall level of prices does not change or it can change very slowly
|
|
|
Absolute |
an individual or a country has an absolute advantage in producing a goods or service if they can produce more output per worker than the other country or individual
|
