Chapter 3 Flashcards
(12 cards)
What are the five factors or detriments of demand
1) Tastes and preferences
2) income
3) number of buyers
4) price of related goods
5) expectations
What is the law of demand
As prices increase quantity demanded decreases
As prices decrease quantity demanded increases
What is the law of supply
If the price goes up the quantities go up
If prices go down and quantities go down
What are the six factors that shift the supply curve
1) Resource prices
2) change in technology
3) taxes and subsidies
4) prices of other goods
5) number of sellers
6) producer expectations
How much of a good is produced and sold in the market
Quantities
Maximum price allowed to charge for a good
Price ceiling
Number of units of a good a consumer purchases
Quantity demand
What is the equilibrium price
Quantity demanded equals quantity supplied
Minimum price allowed to charge for a good
Price floor
When is the price ceiling considered to be effective
When it is below the equilibrium
Shift of the demand curve to the right or left
Change in demand
Movement from one point to another point on demand curve
Change in quantity demanded
