Exam 1 review Flashcards
(29 cards)
What are factors that influence producer’s behavior?
Price of Products, Price of inputs, Technology, Gov. Taxes/Subsidies, and Expectations of future prices
What results in a movement along the supply curve?
Changes in price
What is a movement along the supply curve?
A change in quantity supplied
Changes in variables held constant result in what kind of change to the supply curve?
A shift in the supply curve
What does a shift in the supply curve represent?
A change in supply
As price of inputs rise, quantity supplied ___?
Falls
As price of inputs fall, quantity supplied ___?
Rise
Losing a subsidy ____ profit opportunities.
Shrinks
As gov. taxes rise, supply ___?
Falls
An outward shift in supply represents ___
Growth
An inward shift in supply represents ___
Recession
Expectations about lower future prices cause supply to ___.
Rise
What is the market supply curve?
A horizontal summation of all the individual curves in the market.
A shift in an individual supply curve will also cause a shift in the market ___ curve?
Demand
Market supply is based on ____.
Individual supply
Anything that shifts individual supply also shifts ___.
Market Supply
What is competitive equilibrium?
When quantity supplied is equal to the quantity demanded
Equilibrium is defined in economics as?
A situation from which there is no tendency to change behavior.
What is excess demand?
Quantity demanded exceeds quantity supplied
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.
What is equilibrium price?
QS = QD
What is excess supply?
Quantity supplied exceeds quantity demanded.
What is a shortage?
Quantity supplied exceeds quantity demanded.
The first step to finding a new equilibrium when a demand determinant changes is?
Identify which side of the market is affected
