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Demand/Supply/Market
Question | Answer |
---|---|
quantity of a good that consumers are willing and able to buy per period relates inversely, or negatively, to the price, other things constant | law of demand |
When the price of a good falls, that good becomes cheaper compared to other goods so consumers tend to substitute that good for other goods | Substitution effect of a price change |
A fall in the price of a good increases consumers' real income, making consumers more able to purchase goods; for a normal good, the quantity demanded increases | Income effect of a price change |
goods, such as coke and pepsi, that relate in sch a way that an increase in the price of one shifts the demand for the other rightward | substitutes |
goods such as milk and cookies, that relate in such a way that an increase in the price of one shifts the demand for the other leftward | complements |
movement of a demand curve right or left resulting from a change in one of the determinants of demand other than the price of the good | shift of a demand curve |
the amount of a good that producers are willing and able to sell per period is usually directly related to its price, other things constant | law of supply |
resources used to produce the good in question | relevant resources |
other goods that use some or all of the same resources as the good in question | alternative goods |
movement of a supply curve left or right resulting from a change in one of the determinants of supply other than the price of the good | shift of a supply curve |
to have an impact, a _________ ________ must be set above the equilibrium price | price floor |
to have an impact, a _________ ________ must be set below the equilibrium price | price ceiling |