Supply Curve
If there is an increase in total supply, how does the curve reflect this change?
Shift right
If there's a decrease in total demand, how does the curve reflect this change?
Shift left
An economic situation in which no individual would be better off doing something different
Equilibrium
In the last year, Maryland's population has reduced by 8%. How does this affect the demand for housing?
Decreased demand and the curve shifts leftward.
If the price of leather boots rises, then the supply of beef ____
Increases (Complements in production)
If there is a decrease in total supply, how does the curve reflect this change?
Shift left
If there is an increase in total demand, how does the curve reflect this change?
Shift right
A market is in equilibrium when ____=____
Quantity Demanded= Quantity Supplied
(QD=QS)
If a decrease in the price of good A reduces the demand for good B, then the two goods are:
(Give an example)
Substitutes in consumption (coffee +tea, off-brand +on-brand)
If the price of leather boots rises, then the supply of leather belts ______
What's the relation between these goods?
Decreases... Substitutes in Production
If there is an increase in price, how is this change reflected on the supply curve?
Movement
If there's a decrease in price, what change occurs on the demand curve?
Movement
When a market price drops below the equilibrium price, what happens? Explain.
Shortage in supply
(Qd > Qs) = Price is lower than what suppliers are willing to accept.
If an increase in the price of good A reduces the demand for good B, then the two goods are:
(Give an Example)
Complements in consumption (PB+J, ketchup +mustard, phones +internet)
The price of a gaming console is anticipated to rise around Christmas time. What effect would this have on the supply during the summer?
Decrease in supply --> shift left
When the quantity supplied exceeds quantity demanded this creates a...
Surplus of goods
(Qs>Qd)
When the quantity demanded exceeds quantity supplied this creates a...
Shortage of supply
(Qd>Qs)
When a market price rises above the equilibrium price, what happens? Explain.
Surplus in supply.
(Qs>Qd) = Price is higher than what buyers are willing to pay.
When incomes rise, the demand for ___ goods increases.
(Give an example)
Normal goods (medical care, vacations, houses, cars, etc.)
If the price of good A rises and the supply of good B rises, then they are ______.
(Give an Example)
Complements in Production (leather +beef, ply wood +mulch, oil +gas)
What's the difference between a change in supply and a change in quantity supplied?
What do these changes look like on the supply & demand graph?
Change in Supply = shift --> 5 shifters
Change in Quantity Supplied = movement --> change in price
What's the difference between a change in demand and a change in quantity demanded?
What do these changes look like on the supply & demand graph?
Change in Demand = shift --> 5 shifters
Change in Quantity Demanded = movement --> change in price
If supply decreases, how will this effect the equilibrium price and quantity?
The equilibrium price will rise and quantity will drop
When incomes rise, the demand for ___ goods decreases. (Give example)
Inferior goods (fast food, discount clothing, generic products, etc.)
If the price of good A rises and the supply of good B decreases, then these goods are _______.
(Give an Example)
Substitutes in Production (bolts +screws, laptop +desktop, leather boots +belts)