College Economics Ch.1 2/2 Flashcards
Consumer tastes or preferences
The benefits or utility that consumers expect to receive from a good
Non-price determinantd
Things other than the price of the good that affects consumers buying desicions
Number of buyers
The size of the consuming population
Income
The consumers’ ability to purchase goods
Price of related goods
Substitute and complement goods. Decrease(increase) in the price of a substitute good, decrease(increase) in the demand for other good. Decrease(increase) in the price of a complement good, increase(decrease) in demand for other good
Expectations
What consumers believe will happen in the future regarding things like income,prices, and availability
Change in Demand
An increase or decrease in the quantity of a good that consumers wish to purchase at any and all prices. A shifting of the curve. A change in something other than the price of the good causes to buy more or less of the good
Supply
The relationship between the price of a an the desired rate of selling
Law of Supply
The higher the price of a good
The greater the desired rate of selling
A decrease in quantity supplied
A reduced desired rate of selling caused by a lower price
An increase in quantity supplied
Is a greater desired rate of selling caused by a higher price
Input(factor) prices
Changes in the price of land,labor,capital,or raw materials
Change the unit cost of production
Higher input prices causes a decrease in supply;lower input prices cause unit costs of production to decrease which causes an increase in production
Business taxes an subsidies
Taxes are payments businesses make to the government
Subsidies are payments the government makes to businesses
Technology
Better,more efficient methods of producing goods requires fewer resources and increased supply
Other factors
In some cases the weather can make more or few agricultural goods available,
laws restricting production;expectations about future prices or business conditions. Something that increases availability,increases supply;something that reduces availability,decreases supply
