Flashcards in Exam 1 review Deck (29)
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1
What are factors that influence producer's behavior?
Price of Products, Price of inputs, Technology, Gov. Taxes/Subsidies, and Expectations of future prices
2
What results in a movement along the supply curve?
Changes in price
3
What is a movement along the supply curve?
A change in quantity supplied
4
Changes in variables held constant result in what kind of change to the supply curve?
A shift in the supply curve
5
What does a shift in the supply curve represent?
A change in supply
6
As price of inputs rise, quantity supplied ___?
Falls
7
As price of inputs fall, quantity supplied ___?
Rise
8
Losing a subsidy ____ profit opportunities.
Shrinks
9
As gov. taxes rise, supply ___?
Falls
10
An outward shift in supply represents ___
Growth
11
An inward shift in supply represents ___
Recession
12
Expectations about lower future prices cause supply to ___.
Rise
13
What is the market supply curve?
A horizontal summation of all the individual curves in the market.
14
A shift in an individual supply curve will also cause a shift in the market ___ curve?
Demand
15
Market supply is based on ____.
Individual supply
16
Anything that shifts individual supply also shifts ___.
Market Supply
17
What is competitive equilibrium?
When quantity supplied is equal to the quantity demanded
18
Equilibrium is defined in economics as?
A situation from which there is no tendency to change behavior.
19
What is excess demand?
Quantity demanded exceeds quantity supplied
20
What is a bidding mechanism?
A process by which unsatisfied buyers try to change the price of a good in order to guarantee that they are able to obtain it.
21
What is equilibrium price?
QS = QD
22
What is excess supply?
Quantity supplied exceeds quantity demanded.
23
What is a shortage?
Quantity supplied exceeds quantity demanded.
24
The first step to finding a new equilibrium when a demand determinant changes is?
Identify which side of the market is affected
25
What is the second step in finding a new equilibrium when a demand determinant changes?
Identify how it will affect the curve
26
What happens to the equilibrium when a substitute good's price increases?
The bidding mechanism bids up
27
When a substitute good's price rises, is there excess demand or supply?
Excess Demand
28
If the price of bagels (which are substitute goods for bread) rises, what happens to the bread market?
It grows due to increasing demand
29