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Economics > Supply & Demand > Flashcards

Supply & Demand Flashcards

1
Q

Demand

A

Consumer willingness and ability to purchases a good/service

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2
Q

Supply

A

Producer willingness and ability to create a good/service

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3
Q

What causes a change in quantity demanded?

A
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4
Q

What causes change in Demand?

A
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5
Q

Elasticity of Demand

A

A change in demand when one consumer variability.

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6
Q

Equilibrium

A

When Demand and Supply meet. The ideal point for consumers and producers.

Also known as Market Price

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7
Q

What happens if Demand decreases?

A

Price goes down, Quantity goes down

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8
Q

What happens if Supply Increases?

A

Prices goes down, Quantity goes up

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9
Q

What happens if Demand increases?

A

Prices goes up, Quantity goes up

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10
Q

What happens if Supply decreases?

A

Prices goes up, Quantity goes down

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11
Q

What shifts Demand?

A

-Change in consumer tastes
-Change in consumer income
-Change in price of substitute
-Change in complementary good/service
-Consumer expectation
-Change in Population

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12
Q

What shifts Supply?

A

Cost of availability of resources
Productivity rate
Technology
Expectation
Government regulations
Number of producers
Taxes

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13
Q

What does a demand curve describe?

A

relationship between Price and Quantity demanded

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14
Q

What does a supply curve describe?

A

relationship between Price and Quantity supplied

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15
Q

What is the Law of Demand?

A

As price of a good/service increases, quantity decreases;

As price of a good/service decreases, quantity increases

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16
Q

What is the Law of Supply?

A

As price of a good or service increases, quantity supplied increases;

As price of good/service decreases, quantity supplied decreases

17
Q

Price Ceiling

A

A set maximum that a product/service could be sold for (results in surplus)

18
Q

Price Floor

A

A set minimum that a product/service could be sold for (results in shortage)

19
Q

Surplus

A

When a good or service is priced above market clearing price
(Not enough demand for supply)

20
Q

Shortage

A

When a good or service is priced below the market clearing price
(Not enough supply for demand)

21
Q

Inelastic Demand

A

Price changes does not greatly affect demand

22
Q

Elastic Demand

A

Price changes strongly affect demand

23
Q

Perfectly Inelastic

A

Price changes do not affect demand at all

24
Q

Perfectly Elastic

A

Quantity demanded changes infinitely to any change in price

25
Q

Unit Elastic

A

Quantity demanded changes by same percentage as price

26
Q

Price x Quantity

A

Total Revenue

Economics (4 decks)

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