OPENSTAX CH. 3 Flashcards Preview

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Flashcards in OPENSTAX CH. 3 Deck (45):
1

demand

amount of some good/service consumers are willing and able to pruchase at each price, based on needs and wants, based on ability to pay

2

pice

what buyer pays for specific unit of good or service

3

qty demanded

total number of units purchansed at that price; increase price , lower demand

4

law of demand

inverse relationship between price and quatnity demanded, assumes everything else constant

5

demand schedule

table showing qty demanded at each price

6

demand curve

shows relationship between price and quantity demanded

7

demand refers to _, qty demand refers to _

curve, specific point on curve

8

supply

amount of some gs a producer is willing to supply at each price

9

price is what

producer recieves for selling one unit of good/service - rise in price usually equals rise in quatnity supplied of g/s

10

supply curve

graphic illustration of relationship between price and quantity

11

equilibrium

point where supply curve and demand curve cross

12

equilibrium price

quantity demand equals equantity supplied

13

excess surpus

any above equilibrium price, qty supplied exceeds qty demanded

14

if price is above equilibrium level what happens

incentives built into structure of d/s will create pressures for price to fall towards equilibrium

15

excess demand/shortage

at given price, qty demanded exceeds qty supplied which had been depressed by lower price; price will rise towards equilibrium level

16

facotrs affecting demand

taste, preferences, income, price of related goods, size and composition of population, expectations

17

ceteris paribus assumption

other things equal

18

normal good

porudct whose demand rises when income rises

19

infereior good

product whose demand falls when income rises

20

subsitutte

g/s that can be used in place of another g/s

21

complements

onsump of 1 equals consump of other

22

shift in demand

happens when change in some economic factor other than price causes a different equanitty to be demande at every price

23

shift in supply

cange in quaty supplied at every price

24

factors affecting supply

profts, cost of product, inputs, labor, materials, machinery, weather, natural conditions, new technoloyg, governemnet policies

25

subisdy

when gov pays firm directly or reduces firm's taxes if firm carries out cetian actions

26

quantity supplied is greater than quantity demand equals what

surplus

27

efficienty

when its impposible to improve situation of one party without imposing ost on another

28

inefficienty

possile to benefit at least one party without imposing cost on others

29

consumer surpus

amt individual wouldbe been willing to pay minus amt they actually pay

30

consumer surplus on a graph

area above market price and below demand curve

31

producer surplus

amt seller paid for good minus sellers actual cost

32

producer surplus on graph

area between market price and segment of supply curve below equibilirium

33

social surplus/economic suprplus/total surplus

sum of consumer surplus and producer surplus

34

deadweight los

loss in social surplus occus when economy produces at inefficientn quantity, when this exists, it is possible for both consumer and producer surplus to be higher; gain to consumer is less than loss to producers

35

supply

max amt of product sellers are willing and able to provide for sale over relevant range of prices

36

market equilibrium is

amount producers want to sell equal amt consumers want to buy

37

price above equilibrium price leads to what

excess supply

38

price ceilings cause goods to

be rationed by some other means than free market prices

39

surpus exists when

Q supply is greater than Q demanded

40

binding price floor

results in product surplus

41

supply of dvd decrease, demand of dvd increase - what happens to equilibrium price and equilibrium qty

equilibrium price increase, equilibrium qty rise/fall

42

market demand curve graphically is what

horiziontal sum of individual demand curves

43

improvement in tecnology used to produce a good x does what to supply, equilibrium price, equilibrium qty

supply increase, equilibrium price decreases, increases equilibrium qty

44

in model of demand curve, economists presume most important variable in detemrining Qdemanded is

price of product itself

45

supply of dvd increase, demand for dvd decrease, equilibrium price and equilibrium qty is how affected

equilibrium price decreases, equilibrium qty rise/fall