intro to micro Flashcards
(45 cards)
Microeconomic
Branch of economics that deals with the behaviour of individual economic units—consumers, firms, workers, and investors—as well as the markets that these units comprise.
Arbitrage
Practice of buying at low price and selling at high price
Market
Collection of buyers and sellers that, through their actual or potential, determine the price of a product or set of product
Gali keist kaina
Market definition
Determination of the buyers, sellers, and range of products that should be included in a particular market
Pirkėjų, pardavėjų ir produktų asortimento, kurie turėtų būti įtraukti į tam tikrą rinką, nustatymas
Perfectly competitive market
market with merry buyers and sellers so no single buyer or seller has a significant impact on price
Supply curve
Relationship between the quantity of a good that producers are willing to sell and the price of the good.
The supply curve labeled s in the figure shows….
shows how the quantity of a good offered for sale changes as the price of the good changes.
The supply curve upward sloping
the higher the price, the more firms are able and willing to produce and sell.
If in supply curve production costs fall…
firms can produce the same quantity at a lower price or a larger quantity at the same price. The supply curve shifts to the right (from S to S’)
Demand curve
shows how much of a good consumers are willing to buy as the price per unit change. Relationship between the quantity of a good that consumers are willing to buy and the price of the good.
parodo, kiek gėrybių vartotojai nori pirkti pasikeitus vieneto kainai. Prekės kiekio, kurį vartotojai nori pirkti, ir prekės kainos santykis.
The demand curve labeled d shows…..
shows how quantity of a good demanded by consumers depends on its price.
The demand curve is downward sloping;
holding other things equal, consumers will want to purchase more of a good as its price goes down.
What depends quantity of demand curve
The quantity demanded may also depend on other variables, such as income, the weather, and the prices of other goods. For most products, the quantity demanded increase when income rises.
If higher income level the demand curve will
A higher income level shifts the demand curve to the right (from D to D’)
Shifting the demand curve
If the market price were held constant at P1, we would expect to see an increase in the quantity demanded - say, from Q1 to Q2, as a result of consumer’ higher incomes. Because thus increase would occur no matter that the market price, the result would be a SHIFT TO THE RIGHT OF THE ENTIRE DEMAND CURVE
Substitute
Substitute - Two goods for which an increase in the price of one leads to an increase in the quantity demanded of the other.
Complements
Complements - Two goods for which an increase in the price of one leads to a decrease in the quantity demanded of the other.
Equilibrium (or market clearing) price
Price that equates the quantity supplied to the quantity demanded.
Market mechanism
Tendency in a free market for price to change until the market clears.
Surplus Situation
in which the quantity supplied exceeds the quantity demanded.
Shortage Situation
in which the quantity demanded exceeds the quantity supplied.
When the supply curve shifts to the right
the market clears at a lower price P3 and a larger quantity Q3.
When the demand curve shifts to the right
the market clears at a higher price P3 and a larger quantity Q3.
When shifts curves demand and supply
Supply and demand curves shift over time as market conditions change.
