Chapter 4 Micro Test Flashcards Preview

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Flashcards in Chapter 4 Micro Test Deck (23):
1

What is an example of a normal good and why

Beer because when i have more money I am going to want to buy more beer

2

What is an example of a compliment good?

Hotdog and ketchup
When the price of a hot dog goes up you want less ketchup

Ketchup is the compliment good

3

Supply Curve

GRAPH that shows price of a good and quantity supplied

4

Compliment

When one good relies on the other then the demand shifts

5

What is an example of an inferior good?

When your income increases your demand for bus rides decreases

6

Competitive Market

When prices are influenced because there are many players in the market

7

Demand Schedule

A TABLE that shows a price of a good and quantity demanded

8

Supply Schedule

The table that shows the price and quantity supplied

9

Quantity Demanded

the amount of product BUYERS want

10

Surplus

When there is too much of something and not enough buyers

11

Quantity Supplied

The amount of a good or service that
SELLERS want to sell

12

Law of Demand

the quantity demanded falls when price goes up

13

Law of Supply and Demand

The idea that a price of a good will adjust based on supply and demand

14

What is an example of a substitute good?

When the price of cream cheese goes up you buy butter
Therefore, Butter is a substitute for cream cheese

15

Substitutes

When the price of one good goes up, then you switch over to competitors

16

Shortage

When there is not enough of a good but people want it

17

Demand Curve

A GRAPH of a relationship between price and quantity demanded

18

Normal Good (Think about what normal actually means)

When income increases demand increases
When income decreases demand decreases

19

Market

A group of buyers and sellers of a good

20

Law of Supply

When the price of a good goes up the quantity supplied goes up

21

Equilibrium

The market price of a good where supply and demand meet

22

Inferior Good (Think of Inverse)

When income increases demand decreases
When income decreases demand increases

23

How do I solve equilibrium equation

Set quantity supplied equal to quantity demanded then solve for price

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