Upgrade to remove ads
Only ₩37,125/year
Review terms and definitions
Focus your studying with a path
Take a practice test
Get faster at matching termsHow do you want to study today?
Flashcards
Learn
Test
Match
Terms in this set (55)
Market:
A group of buyers and sellers of a particular good or service.
Competitive Market:
Market with many buyers and many sellers.
Characteristics of a perfectly competitive market
1) Same good (cannot tell the difference between sellers)
2) So many buyers and sellers that none can influence the market price.
3) Not all goods are sold
Why are buyers and sellers "price takers"?
They must accept the market price as given.
Non perfect competitive markets:
1) Monopoly
2)Oligopoly
3)Monopolistic competition
Monopoly:
A market with only one seller (electricity)
Oligopoly:
A market with only few sellers ( car manufacturers)
Monopolistic Competition:
a market with a large number of sellers ( toothpaste manufacturers)
Quantity Demanded:
The amount of a good that buyers are willing and able to purchase.
-determined by price
-negatively related to price-- demand curve is downward sloping
Law of Demand:
other things equal, the quantity demanded of a good falls when the price of the good rises.
Demand Schedule:
A table with price of a good and the quantity demanded.
Demand Curve:
A graph of the relationship between the price of a good and the quantity demanded.
Market Demand:
the sum of all all of the individual demands.
Any factors other than price change- demand curve shifts
An increase in demand- shift to the right
A decrease in demand- shift to the left
Normal Good:
An increase in income-- increase in demand
Inferior Good:
an increase in income---- decrease in demand
Substitutes:
Increase in the price of one good-- increase in the demand for the other good
Complements:
Increase in the price of one good -- decrease in the demand for the other good
Tastes:
ex. General Surgeon Recommendations... cigarettes and cancer
Expectations:
Future Income: ex. higher future income increase current demand
Future Prices: ex. higher future prices increase current demand
Number of buyers:
more buyers-- higher demand
T/F: If the demand for a good falls when income falls, the good is called an inferior good.
False
T/F: When an increase in the price of one good lowers the demand for another good, the two goods are called complements.
True
T/F: Baseballs and baseball bats are substitute goods.
True
T/F: An increase in the price of pizza will shift the demand curve for pizza to the left.
True demand down = shift to left
T/F: Whenever a determinant of demand other than price changes, the demand curve shifts.
True
T/F: A reduction in the price of a product and an increase in the number of buyers in the market affect the demand curve in the same general way.
...
The Supply Curve:
The relationship between price and quantity supplied
Quantity Supplied:
the amount of a good that sellers are willing and able to sell.
-always positively related to price.
Law of Supply:
other things equal, the quantity supplied of a good rises when the price of the good rises
Supply Schedule:
a table with price of a good and the quantity supplied
Supply Curve:
a graph of the relationship between the price of a good and the quantity supplied
change in quantity supplied- movement along the supply curve
T/F: The quantity supplied of a good or service is the amount that sellers are willing and able to sell at a particular price.
True
T/F: The law of supply states that other things equal , when the price of a good rises, the quantity supplied of the good falls.
False
When any factors other than price change, the supply curve will shift.
increase in supply-- shift of the supply curve to the right
decrease in supply-- shift of the supply curve to the left.
Input prices:
higher, the supply decreases ( higher cost)
Technology:
Higher productivity, supply increases(lower cost)
Expectations:
higher future prices--- lower supply
Number of sellers
more sellers--- higher supply
T/F: If a company making frozen orange juice expects the price of their product to be higher next month, they will supply more to the market this month.
False
T/F: A supply curve slopes upward because, all else equal, a higher price mean a greater quantity supplied.
True
T/F: a movement along the supply curve is called a change in supply while a shift of the curve is called a change in quantity supplied.
False
-movement along
supply curve- change in quantity supplied
-shift of the curve- change in supply
T/F: If there is an improvement in the technology of producing a product. the supply curve for the product will shift to the left.
False
The supply will increase and therefore shift to the left.
T/F: a reduction on an input price will cause a change in the quantity supplied, but not a change in supply.
False
supply will increase
Market's Equilibrium:
the point where the supply and demand curves intersect
Equilibrium:
when at certain price quantity supplied equals quantity demanded.
Equilibrium price:
the price that balances quantity supplied and quantity demanded
Equilibrium quantity:
the quantity supplied and the quantity demanded at the equilibrium price.
Surplus:
-quantity supplied is greater than quantity demanded
-if actual market price is higher than the equilibrium price
to lower surplus: producers lower the price (sales)
Shortage:
-quantity demanded is greater than quantity supplied
-if the actual price is lower than the equilibrium price
-sellers raise the price until the market reaches equilibrium
Law of supply and demand:
the price adjusts to bring the supply and demand into balance (equilibrium)
T/F: Quantity demanded is equal to quantity supplied, at the equilibrium price
True
T/F: Surpluses drive up the price while shortages drive down price:
False
Opposite
T/F: A shortage will occur at any price below the equilibrium price and a surplus will occur at any price above the equilibrium price.
True
Three Steps to Analyze Changes in the Equilibrium
-event shifts supply or demand(or maybe both)
-which direction the curves shift
-use the supply and demand diagram to see the changes
Principles of Microeconomics
7th EditionN. Gregory Mankiw
830 solutions
Principles of Economics 2e
2nd EditionDavid Shapiro, Steven Greenlaw, Timoth Taylor
Essentials of Investments
8th EditionAlan J. Marcus, Alex Kane, Zvi Bodie
663 solutions
Essential Foundations of Economics
7th EditionHenry Cheeseman
232 solutions
Sets with similar termsmicroeconomics chapter 4
60 terms
kkowski
Chapter 4
47 terms
katherinejeckovich
Econ1 Chapter 4 Terms
42 terms
marcelasosa
Chapter 4: Market forces of Supply and Demand
35 terms
nolan_m_klein
Sets found in the same folderMicro Economics Chapters 10, 11, 14
62 terms
Seminoles2448
Chapter 4
40 terms
kristina_evanko
micro ch 17
25 terms
Shen2012
ABE-204 Ch 5
58 terms
jessi_neary
Other sets by this creatorMicroeconomics Exam 1 Chapter 4
22 terms
rhowlett9
Microeconomics Exam 1
29 terms
rhowlett9
Verified questions
ECONOMICS
Economists use the phrase _____ to describe the trade-offs a country is forced to make when choosing between military and consumer production.
Verified answer
ECONOMICS
Describe the two ways the BLS measures total employment.
Verified answer
ECONOMICS
Describe the relationship between marginal cost and total cost.
Verified answer
QUESTION
The poverty threshold is not adjusted to reflect changes in the standard of living. As a result, is the poverty threshold a relative or an absolute measure of poverty? That is, does it define poverty according to how poor someone is relative to others or according to some fixed measure that doesn't change over time? Explain
Verified answer
Other Quizlet setsPR TEST 1
40 terms
mcb0128
Chapter 6 Test (Questions from Test)
11 terms
Oliviyah_Thornton
Ch. 8 Micro
131 terms
K__Dickerson
Related questionsQUESTION
why would all lactose fermenters be ignored on the plates
2 answers
QUESTION
Determining the Price for a Monopolistically Competitive Firm:
3 answers
QUESTION
With most light microscopes, what is the total magnification if using the objective lens that is closest to the specimen along with the ocular lens?
2 answers
QUESTION
Reliance on indicators of productivity such as education, experience, and test scores may keep some very good people from getting a job and may result in hiring unproductive people. This is called:
2 answers