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Flashcards in Economics Final Deck (13)
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The amount of a good that buyers willing and able to purchase

Quantaty demanded

1

The quantity demanded of a good falls when the price of the good rises.

Law of demand

2

Movement along the demand curve. Caused by a change in the price of the product.

Change in quantity demanded

3

The amount of a good that sellers are willing and able to sell.

Quantity supplied

4

The quantity supplied of a good rises when the price of the good rises

Law of supply

5

Movement along the supply curve. Caused by a change in the price of the product.

Change in quantity supply

6

The price of any good adjusts to bring the quantity supplied and quantity demanded for that good.

Law of supply and demand

7

Qs=Qd

Equilibrium

8

Demand shifters:

Tastes and preferences
Income of consumers
Related goods: substitutes + compliments
Expectations of future price changes
Size of population/market

9

Measurement of consumers' sensitivity to price

Elasticity of demand

10

Buyers are responsive to price changes

Elastic

11

Buyers are not responsive to price changes( these goods are needed for survival)

Inelastic

12

Determinants of demand elasticity:

1.availability of substitutes
2.price is relative to income
3.neccesities vs. luxuries
4.time needed to adjust to price changes