Micro Questions Flashcards
(30 cards)
What does ‘P’ in PINTE stand for?
Price of related goods (substitutes and complements)
What does ‘I’ in PINTE stand for?
Income — normal and inferior goods
What does ‘N’ in PINTE stand for?
Number of buyers
What does ‘T’ in PINTE stand for?
Tastes and preferences
What does ‘E’ in PINTE stand for?
Expectations of future prices
What are substitute goods?
Goods that can replace each other (e.g., Pepsi and Coke)
What are complementary goods?
Goods that are used together (e.g., hot dogs and buns)
What happens to demand for normal goods when income increases?
It increases
What happens to demand for inferior goods when income increases?
It decreases
What is market equilibrium?
The point where supply and demand curves intersect — equilibrium price and quantity
What does ‘i’ in iNOTE stand for?
Input Prices
What does ‘N’ in iNOTE stand for?
Number of Sellers
What does ‘O’ in iNOTE stand for?
Outside Options
What does ‘T’ in iNOTE stand for?
Technology/Productivity
What does ‘E’ in iNOTE stand for?
Expectations of future prices
How do input prices affect supply?
Higher input costs reduce supply (shift left)
What happens when more sellers enter a market?
Supply increases (shift right)
What happens when producers switch to a more profitable good?
Supply of the original good decreases
How does technology affect supply?
Improved tech increases supply (shift right)
What happens when producers expect prices to rise?
They may hold back supply now (shift left)
What is Quantity Demanded?
How much people want at a specific price — moves along demand curve
What is Demand?
Entire curve — changes due to PINTE — shifts left or right
What is Quantity Supplied?
How much sellers will supply at a specific price — moves along supply curve
What is Supply?
Entire curve — changes due to iNOTE — shifts left or right
