Demand & Supply
Things that cause a shift in the supply curve
If Quantity Supplied is greater than Quantity Demanded we have
What is surplus
When there is scarcity you have to face
What is trade offs
The formula used to calculate price elasticity of demand
% change in quantity demanded/ % change in price
What is an opportunity cost
What is the highest-value option that you didn't take
Factory 1 can produce 200 jackets using all of its workers/machines. Factory 2, with the same resources, produces only 90 jackets. Which factory is more efficient
What is Factory 1
A new video game goes viral on TikTok, causing the demand to skyrocket overnight, but the manufacturers do not have enough time to adjust their supply; what does this cause
What is Shortage
Shows the combination of goods a consumer can afford, given income and price
What is budget constraint
If elasticity is greater than 1, demand is considered this
What is Elastic
The equation for marginal opportunity cost
What is change in opportunity cost/ change in outcome
When the price of iced coffee at a coffee shop drops from $6 to $4, the number of cups consumers purchase each day rises from 50 to 70. What economic law does this represent
What is Law of Demand
Trench coats go viral on TikTok, and many people want them, BUT it is now summertime and too hot for them; what does this cause
The economic concept of the thing which people maximize when they make choices
What is utility
If elasticity equals 1, demand is considered this
What is Unit Elastic
If good A and B are complements, what happens to the demand for good A if good B is increased?
What is the demand for good A shifts to the left (decreasing equilibrium price and quantity).
During a surplus producers try to
What is decrease price
The satisfaction of consuming one more thing
Price rises from $12 to $14 and quantity falls from 120 to 100. Using the midpoint formula, calculate elasticity.
If a consumers income increases by 25% and their demand for generic-brand cereal decreases by 6%, generic-brand cereal is classified as
What is inferior good
What is the equilibrium quantity decreases, while the equilibrium price remains unchanged.
During a shortage, producers try to
Marginal utility ______ over time
what is decreases
ex: 100% happiness eating 1 hamburger compared to 35% happiness eating 5 hamburgers
For a price decrease, if demand is elastic what happens to revenue
What is total Revenue increases
Total Revenue =
What is P x Q