Save
Busy. Please wait.
Log in with Clever
or
show password
Forgot Password?
Don't have an account?  Sign up 
Sign up using Clever
or
Username is available taken
show password


Make sure to remember your password. If you forget it there is no way for StudyStack to send you a reset link. You would need to create a new account. Your email address is only used to allow you to reset your password. See our Privacy Policy and Terms of Service.

Already a StudyStack user? Log In

Reset Password
Enter the associated with your account, and we'll email you a link to reset your password.
focusNode
Didn't know it?
click below
 
Knew it?
click below
Don't Know
Remaining cards (0)
Know
0:00
edit
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.

  Normal Size     Small Size show me how

Microeconomics Vocab

QuestionAnswer
Market A group of buyers and sellers of particular good or service.
Buyers Determine the demand for the product
Sellers Determine the supply of the product
Competitive market A market in which there are so many buyers and so many sellers that each has a negligible impact on the market price.
For a market to be perfectly competitive, it must have two characteristics: The goods offered for sale are exactly the same. The buyers and sellers are so numerous that no single buyer or seller has any influence over the market price.
Price takers Buyers and sellers must accept the price the market determines.
Monopoly Some markets have only one seller, and this seller sets the price.
Quantity demanded The amount of the good that buyers are willing and able to purchase.
Law of demand When the price of a good rise, the quantity demanded of the good falls, and when the price falls, the quantity demanded rises.
Demand schedule A table that shows the relationship between the price of a good and the quantity demanded.
Shift to the right Increase in demand
Shift to the left Decrease in demand
Normal good If the demand for a good falls when income falls.
Inferior good If the demand for a good rises when income falls.
Substitutes When a fall in the price of one good reduces the demand for another good.
Complements When a fall in the price of one good raises the demand for another good.
Influencers to buyer behavior Taste, expectations, number of buyers
Quantity supplied The amount that sellers are willing and able to sell
Law of supply When the price of a good rises, the quantity supplied of the good also rises, and when the price falls, the quantity supplies falls as well.
Supply schedule A table that shows the relationship between the price of a good and the quantity supplied.
Curve to the right Increase in supply
Curve to the left Decrease in supply
Influencers to supply Input prices, technology, expectations, number of sellers
Equilibrium Supply and demand curves intersect
Surplus/excess supply Suppliers are unable to sell all they want at the going price
Shortage/excess demand Demanders are unable to buy all they want at the going price
Steps to analyze changes in equilibrium 1. Shift in supply curve 2. Whether the curve shifts right or left 3. Use a supply and demand diagram to compare the initial equilibrium with the new one
Price of elasticity of demand Measures how much the quantity demanded responds to a change in price.
Demand for a good is said to be elastic if the quantity demanded responds substantially to changes in the price.
Goods with close substitutes tend to have more elastic demand because it is easier for consumer to switch from that good to others.
Demand for a good is said to be inelastic if the quantity demanded responds only slightly to changes in the price
Necessities tend to have inelastic demands
Luxuries tend to have elastic demands
Narrowly defined markets tend to have more elastic demand than broadly defined markets
Goods tend to have more elastic demand over longer time horizons
formula for price elasticity of demand percentage change in quantity demand / percentage change in price
Midpoint method formula ((Q2-Q1)/[(Q2+Q1)/2]) / (P2-P1)/[(P2+P1)/2]
Demand is considered elastic when the elasticity is greater than 1 (quantity moves more than price)
Demand is considered inelastic when the elasticity is less than one (quantity moves less than the price)
perfectly inelastic (zero inelasticity) means the demand curve is vertical
when elasticity rises, the demand curve gets flatter and flatter
perfect elasticity means price elasticity of demand approaches infinity and the demand curve becomes horizontal
An inelastic curve looks like the letter I
Formula for total revenue P (price of good) * Q (quantity of good sold)
The height under a demand curve represents p
The width under a demand curve respresents q
The area of the box under a demand curve represents total revenue
When demand is elastic (a price elasticity greater than 1) price and total revenue move in opposite direction
When demand is unit elastic (a price elasticity exactly equal to 1) total revenue remains constant when the price changes
Slope in a revenue curve represents ratio of change over price (rise) / change in quality (run)
Elasticity in a revenue curve represents ratio of percentage change of the two slop variables
Low price, high quantity demand curve is inelastic
high price, low quality demand curve is elastic
linear demand curve illustrates that the price elasticity of demand need not be the same at all points on a demand curve
The income elasticity of demand measures how the quantity demanded changes as consumer income changes.
Income elasticity of demand formula percentage change in quantity demanded / percentage change in income
The cross price elasticity of demand measure how the quantity demanded of one good responds to a change in the price of another good
cross-price elasticity of demand formula percentage change in quantity demand good 1 / percentage change in price of good 2
price elasticity of supply how much the quantity supplied responds to changes in price
price elasticity depends on the flexibility of sellers to change the amount of the good they produce
formula for price elasticity of supply percentage change in quantity supplied / percentage change in price
zero elasticity (perfectly inelastic) means the supply curve is vertical
perfect elasticity means the supply curve is horizontal
Popular Economics sets

 

 



Voices

Use these flashcards to help memorize information. Look at the large card and try to recall what is on the other side. Then click the card to flip it. If you knew the answer, click the green Know box. Otherwise, click the red Don't know box.

When you've placed seven or more cards in the Don't know box, click "retry" to try those cards again.

If you've accidentally put the card in the wrong box, just click on the card to take it out of the box.

You can also use your keyboard to move the cards as follows:

If you are logged in to your account, this website will remember which cards you know and don't know so that they are in the same box the next time you log in.

When you need a break, try one of the other activities listed below the flashcards like Matching, Snowman, or Hungry Bug. Although it may feel like you're playing a game, your brain is still making more connections with the information to help you out.

To see how well you know the information, try the Quiz or Test activity.

Pass complete!
"Know" box contains:
Time elapsed:
Retries:
restart all cards