Laws
According to the law of demand, as prices go up demand does what?
What is demand goes down
This takes place when a consumer reacts to a rise in price of one good by consuming less of that good and more of a substitute good.
What is the substitution effect
This shifter of demand plays an important role in many new trends. Companies spend millions of dollars on this hoping that it will increase demand for the goods they sell.
What is advertising
measures how drastically buyers will cut back or increase demand for a good when the price rises or falls respectively.
What is elasticity of demand
Costs that rise or fall depending on the quantity produced
What is variable costs
According to the Law of supply as prices go up the quantity supplied does what?
What is quantity supplied goes up
If you buy less of one good without increasing your purchases of other goods is called what?
What is the income effect
Two goods that are bought and used together
what is compliments
If you buy the same amount or just a little less of a good after a large price increase your demand is what?
What is inelastic
This is also known as a sin tax
what is excise taxes
According to the law of demand, as prices go down demand does what?
What is demand goes up
What are goods that consumers demand more of when their incomes increase
What is normal goods
Goods that are used in place of one another
Substitutes
If elasticity is exactly equal to 1 it is described as?
Unitary elastic
A government payment that supports a business or market
what is subsidy
What does ceteris paribus stand for?
What is all other things held constant
Goods that you would buy in smaller quantities or not at all if your income were to rise and you could afford something better.
what is inferior goods
Statistical characteristics of populations, such as age, race, gender, occupation and income levels, etc.
What is demographics
If you buy much less of a good after a small price increase, your demand is
what is elastic
The point where labor will produce less and less output from each additional unit of labor
what is diminishing marginal return
According to the law of supply as prices go down what happens to the quantity supplied?
What is it will go down?
Show the quantities demanded at various prices by all consumers in a market
Market demand schedule
What is this an example of? You walk into the store to look at a bike and the salesperson mentions that the store will be raising the bike price in a week. Now that you know the price will rise it has increased your demand for the bike.
What is future expectations
Name of the formula we use to find out the elasticity of a good
what is the midpoint formula
At this stage workers get in each others way and disrupt production
What is negative marginal returns