Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Economics > Markets > Flashcards

Markets Flashcards

1
Q

Demand

A

Amount of a good or service that consumers are both willing & able to buy at each possible price in a given period of time, ceteris paribus

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Law of demand

A

In a given time period, the quantity demanded of a product is inversely related to its price, ceteris paribus

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

LDMU

A

Beyond a certain point of consumption, as more & more units of a good or service are consumed, the additional utility derived from each additional unit consumed will fall

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Individual demand

A

Demand of one consumer

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Non-price determinants of demand

A

Expectations of prices & income, ease of borrowing, government policies, income (inferior & normal goods YED), price of related goods (substitutes & complimentary goods XED, & derived demand, population size/composition, taste & preferences, seasonal factors (weather & festivals)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Supply

A

Amount of a good or service that producers are both willing & able to sell at each possible price in a given period of time, ceteris paribus

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Law of supply

A

In a given time period, the quantity supplied of a product is directly related to its price, ceteris paribus

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Non-price determinants of supply

A

Weather or seasonal factors, expectations of producers, state of technology, price of related goods (joint or competitive supply), price & availability of factor inputs/fop, government policies (subsidies, taxes)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Consumer surplus

A

Difference between the maximum amount consumers are willing & able to pay for a good or service & the amount actually paid for it

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Producer surplus

A

Difference between the amount producers actually receive for a good or service & the minimum amount they are willing & able to accept for it

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

P

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

PED

A

measures the degree of responsiveness of quantity demanded of a good to a change in its price, ceteris paribus

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

|ped| = 0

A

Perfectly price inelastic

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

|ped| < 0

A

Price inelastic

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

|ped| > 1

A

Price elastic

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

|ped| = 1

A

Unitary price elastic (curve)

17
Q

|ped| = infinity

A

Infinitely or perfectly price elastic, straight horizontal

18
Q

Determinants of PED

A

Time period, proportion of income spent, degree of necessity (habits), degree & availability of substitutes

19
Q

Total revenue

A

Total receipts or total earning received by producers from the sale of goods & services

20
Q

YED

A

Measures the degree of responsiveness of a demand for a good to a change in consumers’ income, ceteris paribus

21
Q

yed > 0

A

Normal goods, necessities & luxuries

22
Q

0<yed<1

A

Necessities

23
Q

XED > 0

A

Substitutes

24
Q

XED < 0

A

Complements

25
Q

XED = 0

A

Unrelated/independent

26
Q

|xed| > 1

A

Strong/close substitutes/complements

27
Q

|xed| < 1

A

Weak/not close substitutes/complements

28
Q

Determinants of XED

A

Perceptions of consumers (closeness of relationship/goods/services)

29
Q

PES

A

Measures the degree of responsiveness of quantity supplied of a commodity(good) to a change in its price, ceteris paribus

30
Q

PES = 0

A

Perfectly price inelastic

31
Q

PES < 1

A

Price inelastic

32
Q

PES > 1

A

Price elastic

33
Q

PES = 1

A

Unitary price elastic

34
Q

PES = infinity

A

Perfectly price elastic

35
Q

Determinants of PES

A

Time period/length of complexity of production process, availability of spare capacity & stocks, perishability of good, factor mobility/availability & substitutability of factor inputs

36
Q

Price floor

A

Effective price floor is a legally established minimum price above the market equilibrium price

37
Q

(Indirect) taxes

A

Tax on expenditure on goods & services but not paid directly by the consumers to the government, but indirectly via producers (e.g. gst)

38
Q

Subsidies

A

An amount of money given to the producers for each unit they sell

Economics (4 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions