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22 Cards in this Set
- Front
- Back
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Market |
the consumers that a product is being sold to |
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Barter |
trading without using money |
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Supply |
how much a good producers are willing and able to offer |
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Demand |
desire to own something and the ability to pay for it |
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The Law of Supply |
as a good's price increases/decreases, quantity supplied increases/decreases; direct relationship |
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The Law of Demand |
price decreases, demand goes up/price increases, demand goes down; inverse relationship |
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Elasticity |
buy much less of a good after a small price increase; very responsive to price changes |
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Inelasticity |
buy the same amount of a good after a large price increase; unresponsive to price changes |
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Supply Schedule |
displays quantity of a product supplied @ each price |
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Demand Schedule |
table that shows the law of demand in effect |
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Supply Curve |
shows a graphic representation of the quantities of a good supplied @ various prices |
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Demand Curve |
graph using a demand schedule to track law of demand |
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Equilibrium |
point where demand equals supply |
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Shortage |
demand is greater than supply - run out of product |
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Surplus |
supply is greater than demand - too much product |
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Compliments (commentary goods) |
related goods where increase in price of one leads to decrease in demand for other (goods that are normally consumed together) |
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Substitutes (Substitute goods) |
related goods where increase in price of one leads to increase in demand for other (goods that can be consumed in place of one another) |
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Elasticity formula |
% change in quantity demand/% change in price |
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% change in quantity demand formula |
[(original quantity - new quantity)/original quantity]*100 |
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% change in price formula |
[(original price - new price)/original price]*100 |
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DEMAND SHIFTERS |
1. Change in Consumer Income 2. Change in Consumer Expectations 3. Change in # of Consumers 4. Change in Consumer Tastes and Preferences 5. Change in Prices of Substitute Goods 6. Change in Prices of Complimentary Goods |
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SUPPLY SHIFTER |
1. Change in Price of Inputs 2. Change in Technology 3. Change in Producer Expectations 4. Natural Disasters or International Events 5. Change in # of Producers 6. Change in Government Policy |
