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Micro: Chapter 3 Test

Enter the letter for the matching Definition
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1.
movement along the supply curve (definition)
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2.
5 elements of a supply and demand model
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3.
input
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4.
2 kinds of change...
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5.
shifts in the demand curve (effect of equilibrium price)
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6.
supply curve
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7.
changes in number of producers
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8.
equilibrium quantity
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9.
supply schedule
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10.
Price will move until...
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11.
complements in production
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12.
things that cause a change in quantity supplied
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13.
changes in input prices
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14.
EX: sale of coffee at daily grind in summer vs school year
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15.
changes in income
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16.
change in quantity demanded (definition)
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17.
equilibrium price (market clearing price)
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18.
individual demand curve
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19.
changes in taste
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20.
market demand curves
A.
as you keep adding suppliers, you will continue to push the quantity supplied out further on the graph
B.
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
C.
number of deals that occur at the equilibrium price
D.
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
E.
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
F.
if income increases, quantity demanded will... if normal, up (more income you have, more you want); if inferior, down (more income you have, less you want)
G.
demand curve; supply curve; set of factors that can shift demand/supply curves; market equilibrium; way market equilibrium shifts when curves shift
H.
all else held constant, if demand shifts out (right) = ↑demand, ↑price, ↑quantity; if demand shifts in (left) = ↓demand, ↓price, ↓quantity
I.
changes in the quantity supplied arising from a change in price
J.
Δ PRICE AND ONLY Δ PRICE (movements along an existing line)
K.
works same way demand schedule does, but with supply
L.
moving along on an existing curve; driven by changes in price; CURVE DOESN'T SHIFT
M.
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)
N.
an increase in the price of an input makes the production of the final good more costly for those who produce and sell it; as what you're using becomes more $, will sell product for more (and vice versa); ex: airline ticks and cost of fuel goes up
O.
works in similar way to demand curve; shows relationship between quantity supplied and price; SUPPLY = SELLERS
P.
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
Q.
change in demand vs change in quantity demanded
R.
illustrates the relationship between quantity demanded and price for an individual consumer
S.
changes in number of consumers
T.
good/service that is used to produce another good/service
Type the Term that corresponds to the displayed Definition.
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21.
even if price to produce doesn't change, tech. can still make it cheaper to produce; when better tech is available, reducing cost of production, supply increases, supply curve shifts to the right; ex: assembly line for box maker
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22.
as income goes up, so does demand; the more income you have, the more you want of it; ex= diamond rings, trips to a resort
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23.
in any well-established, ongoing market, all sellers receive and all buyers pay approximately the same price; market price; as market continues on, harder to exploit big differences
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24.
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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25.
the actual amount consumers are willing to buy a good at some specific price
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26.
Qd > Qs; more people want to buy a good then there are goods to go around; occurs below intersection on graph; upward pressure on price; buyers raise prices to entice sellers (some must drop out); as price increases, more sellers interested
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27.
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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28.
if income increases, quantity demanded will increase/decrease depending on whether the good is normal or inferior
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29.
the higher the price, the less people are willing to buy the good; as price goes down, more people are willing to buy
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30.
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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