Supply and Demand
True False
Determinants of Demand
Determinants of demand continued
100
What does this image show?
A decrease in demand
or a decrease in quantity supplied!
100
T/F An increase in your income will increase your demand for inferior goods
False
100
What are two determinants of demand
- Income
-Prices of related goods
-Preferences
-Expectations
-# of buyers
100
If hotdogs and hamburgers are substitutes, what happens to the demand for hotdogs when the price of hamburgers goes up?
Demand for hotdogs increases
200
Give a characteristic of a perfectly competitive market
All goods are identical
lots of buyers and sellers
200
T/F- If your income goes down, your demand for inferior goods increases
true
200
What happens to demand when the number of buyers increases?
Demand increases
200
What's the difference between compliments and substitutes'?
Compliments are things you buy together
Substitutes are things you would swap out
300
If the price is expected to increase in the future, what happens to current demand?
It increases
300
T/F This shows a decrease in quantity demanded
True
300
What is the opportunity cost?
What you give up to get something
300
What's the difference between absolute and comparative advantage ?
Absolute means you can make more output with the given inputs. Comparative advanatge means you can produce at a lower opportunity cost
400
What does this image show?
An increase in demand
or an increase in quantity supplied!
400
T/F- The government decides the price of gas
False, no one does
400
Suppose an article came out stating that drinking Gatorade causes cancer, what would happen to demand for Gatorade?
It would decrease
400
Give an example of a perfectly competitive market
corn, wheat, gas
500
What is the difference between a change in demand and a change in quantity demanded?
A change in demand is a shift in the demand curve, a change in quantity demanded is a movement along the curve
500
T/F- All things equal, when the price of something increases people want to buy less of it
True, the law of demand
500
What is the difference between a normal and inferior good? Give an example of each
Normal goods are good you buy more of when your income goes up
500
If coffee and tea are substitutes, what happens to the demand for coffee if the price of tea decreases.
Demand for coffee would decrease