Test 1
Quiz yourself by thinking what should be in
each of the black spaces below before clicking
on it to display the answer.
Help!
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| show | enough buyers and sellers that no one individual has influence over the price (aka the price at which goods are sold); ex = agriculture (can't set own price, even if some fluctuation, pretty much about the same)
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| show | airlines (anyone can raise/lower price a little bit and affect market); sodas (dominated by Pepsi and Coke)
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| 5 elements of a supply and demand model | show 🗑
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| demand analysis | show 🗑
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| demand schedule | show 🗑
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| demand curve | show 🗑
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| law of demand | show 🗑
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| show | the actual amount consumers are willing to buy a good at some specific price
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| show | change in demand vs change in quantity demanded
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| show | actual movement of the curve to tell new relationship btw p&q
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| change in quantity demanded (definition) | show 🗑
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| show | if income increases, quantity demanded will increase/decrease depending on whether the good is normal or inferior
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| normal goods | show 🗑
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| inferior goods | show 🗑
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| show | Δ price of related goods; Δ income; Δ tastes/preferences; Δ expectations; Δ # of consumers
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| show | Δ PRICE; NOTHING BUT A CHANGE IN PRICE
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| changes in price of related goods/services | show 🗑
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| show | goods that in some way serve a similar function; increase in price of A means increase in demand of B; people will spend their money on one or the other (and they'll choose the cheaper one); ex: movies at home vs theater; bc A more $, 'substitute' A for B
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| show | goods that in some sense are consumed together; increase in pride of A means decrease in demand of B; bc A&B like a package deal, if one gets expensive, won't purchase other either; ex = hot dogs and hot dog buns; DVD players and DVDs
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| changes in income | show 🗑
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| show | demand up; complements
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| show | demand down; substitutesf
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| show | people want more/less of something at any given time; changes in demand bc Δ... fads, beliefs, cultural shifts; fads come and go; ex: poodle skirts, Mark McGuire Baseball card
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| changes in expectations | show 🗑
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| EX: Iced coffee during the winter | show 🗑
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| show | the more consumers participate in a certain market, the more demand there will be
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| show | illustrates the relationship between quantity demanded and price for an individual consumer
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| show | the horizontal sum of the individual demand curves of all consumers in a market; the more people you add, the more demand you will have
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| EX: sale of coffee at daily grind in summer vs school year | show 🗑
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| show | actual amount of a good or service people are willing to sell at some specific price; at any given $, how much are producers willing to supply
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| show | works same way demand schedule does, but with supply
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| supply curve | show 🗑
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| law of supply (?) | show 🗑
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| show | change in the quantity supplied of a good or service at any given price. represented by change of original supply curve to a new posItion; DEMAND CHANGES W/SAME PRICE
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| show | changes in the quantity supplied arising from a change in price
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| show | Δ input prices; Δ price of related goods/services; Δ technology; Δ # of producers; Δ expectations (not talked about in class)
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| things that cause a change in quantity supplied | show 🗑
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| changes in input prices | show 🗑
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| input | show 🗑
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| show | very similar to that of the demand curve; involves substitutes in production and complements in production
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| show | must choose between 1 option or the other (ex: Honda can either make a Civic or an Accord); if $ of substitute good goes up, make more of it at expensive of other good; $ of A rises = ↑production A, ↓production B
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| show | making one facilitates the making of the other (ex: lumber and sawdust); price of lumber ↑, make more lumber, produce more sawdust as a result (even if price of sawdust didn't change)
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| changes in technology | show 🗑
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| show | changes in the expected future price of the good can lead a supplier to supply less or more of the good today
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| show | as you keep adding suppliers, you will continue to push the quantity supplied out further on the graph
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| individual supply curves | show 🗑
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| show | combined total quantity supplied by all individual producers in the market depends on the market price of that good; horizontal sum of all individual supply curves of all producers
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| show | it's an advance in technology; makes it cheaper to produce, so at any given price, sellers are willing to sell more
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| show | oil and natural gas are compliments in production; supply curve shifts outward (right)
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| EX: drop in sugar price and supply of chocolate | show 🗑
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| EX: new restaurant opens and supply of friend appetizers? | show 🗑
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| show | "invisible hand" desire to do as well as possible surplus wise; indiv who do as well as possible pushes toward equilibrium; every buyer that wants to by = sellers that want to sell; no deals that could make either better off w/out making other worse off
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| show | no seller can improve by selling at a cheaper price; no buyer who would've been willing to buy something w/out a high price; quantity of goods demanded = quantity of goods supplied
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| show | everyone who wants to sell has sold and everyone who wants to buy has bought; everyone else, at this price, you're not playing (people who haven't made deals/can't afford to make deals); Qd=Qs
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| equilibrium quantity | show 🗑
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| market price | show 🗑
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| show | at beginning buyers don't know better; as you continue, you know it's too high and can buy for cheaper else where
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| buyers asks for abnormally low price? | show 🗑
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| surplus | show 🗑
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| shortage | show 🗑
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| show | surplus (Qd < Qs) = price drop
shortage (Qd > Qs) = price increase
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| show | all else held constant, if demand shifts out (right) = ↑demand, ↑price, ↑quantity; if demand shifts in (left) = ↓demand, ↓price, ↓quantity
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| show | all else held constant, if supply shifts out (right) = ↑supply, ↓price, ↑quantity; if supply shifts in (left) = ↓supply, ↑price, ↓quantity
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| show | demand curve shift = quantity/price in same direction
supply curve shift = quantity/price in different directions
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| show | ↑D and ↓S ↑$, Q ambiguous
↑D and ↑S $ ambiguous, ↑Q
↓D and ↑S ↓$, Q ambiguous
↓D and ↓S $ ambiguous, ↓Q
ambiguous? depends on which curve's magnitude of change was larger
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| to recap... | show 🗑
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Review the information in the table. When you are ready to quiz yourself you can hide individual columns or the entire table. Then you can click on the empty cells to reveal the answer. Try to recall what will be displayed before clicking the empty cell.
To hide a column, click on the column name.
To hide the entire table, click on the "Hide All" button.
You may also shuffle the rows of the table by clicking on the "Shuffle" button.
Or sort by any of the columns using the down arrow next to any column heading.
If you know all the data on any row, you can temporarily remove it by tapping the trash can to the right of the row.
To hide a column, click on the column name.
To hide the entire table, click on the "Hide All" button.
You may also shuffle the rows of the table by clicking on the "Shuffle" button.
Or sort by any of the columns using the down arrow next to any column heading.
If you know all the data on any row, you can temporarily remove it by tapping the trash can to the right of the row.
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Created by:
nicook
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