Transcript Chapter Two review

To shift or
not to shift
Chapter
three
Definitions
Goods
Putting it all
together
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A For $100
An institution or
mechanism that brings
together buyers and
sellers of particular
goods, services, or
resources.
What is a market?
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A For $200
A schedule or a curve that shows
the various amounts of a product
that consumers are willing and
able to purchase at each of a
series of possible prices during a
specified period of time.
What is demand?
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A For $300
A schedule or curve showing
the amount of a product that
producers are willing and able
to make available for sale at
each of a series of possible
prices during a specific period.
What is supply?
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A For $400
The table form of
representing demand.
What is a demand
schedule?
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A For $500
As prices rise, the quantity
supplied rises, as price falls, the
quantity supplied falls.
What is the law of
supply?
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B For $100
Products whose demand
varies directly with money
income.
What are normal goods?
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B For $200
Products whose
demand varies
inversely with money.
What are inferior
goods?
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B For $300
Goods that can be used in
place of another good.
What are
substitution
goods?
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B For $400
Goods that are used together with
other good.
What are
complementary
goods?
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B For $500
Goods that are not related to one
another.
What are independent goods?
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C For $100
If beef and chicken are substitutes,
then this is what happens when the
price of beef rises.
What is the
demand for
chicken rises?
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C For $200
If Hummers and
gasoline are
complements, then this
is what happens when
the price of gasoline
increase.
What is the demand
for Hummers
decreases?
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C For $300
Expectations of higher future
prices may cause this change in
demand today.
What is increase current
demand ?
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C For $400
You work for BP and there
is news that your business
is going to lay-off 10,000
employees in the next sixmonths, thus your demand
for a vacation does this.
What is
decrease?
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C For $500
Higher resource prices raise
production cost, thus causing
this change in supply.
What is a decrease in supply?
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D For $100
It is represented in a
shift of the supply
curve to the right.
What is an
increase in
supply?
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D For $200
It is represented by a
change in the quantity
demanded.
What is a
movement along a
fixed demand
curve from one
point to another
point?
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D For $300
This relationship exist
between price and quantity
demanded.
What is an
inverse
relationship?
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D For $400
They are all the determinants that
will shift the demand curve to the
right or left.
What are;
•
•
•
•
•
Consumers’ taste
Consumers’ incomes
Number of consumers in the market
Consumer expectations
Price of related goods
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D For $500
They are all the determinants
that will shift the supply
curve to the right or left.
What are;
•
•
•
•
Resource prices
Prices of alternative goods
Technology
Number of sellers in the
market
• Price expectations
• Subsidies
• Taxes?
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E For $100
Graphically, the
intersection of the
supply curve and the
demand curve for a
product indicates this.
What is market
equilibrium?
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E For $200
We can see this effect when a
decline in the price of chicken
will increase the purchasing
power of consumers, enabling
people to buy more chicken.
What is the income
effect?
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E For $300
They are all the factors that
determine the relationship
between price and quantity
demanded.
What are;
• People buy more of a product at a
low price.
• Law of diminishing marginal
utility.
• Income effect.
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• Substitution effect?
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E For $400
Improvements in technology
enable firms to produce units of
output with fewer resources,
leading to this.
What is an
increase in
supply?
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E For $500
It occurs when there is any
price level above equilibrium.
What is a surplus of
product?
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