Demand Basics
Double Jeopardy:
This economic principle states that as price increases, quantity demanded decreases.
What is the Law of Demand?
This economic principle states that as price increases, quantity supplied usually increases.
What is the Law of Supply?
This economic term describes where supply meets demand.
What is equilibrium?
This shows the relationship between inputs (like workers) and outputs (finished products).
What is a production function?
This government-set price acts as a maximum, often used for rent control.
What is a price ceiling?
This type of good sees its demand increase as income increases.
What is a normal good?
These costs remain the same regardless of production levels, like rent or insurance.
What are fixed costs?
This occurs when price is above equilibrium, resulting in unsold goods.
What is a surplus?
Double Jeopardy:
This is calculated by multiplying price by quantity sold.
What is total revenue?
This government-set price acts as a minimum, like with labor wages.
What is a price floor?
These are goods often used together, like phones and phone cases.
What are complements?
This term describes the extra output from adding one more worker.
What is marginal product?
Double Jeopardy:
This happens when price is below equilibrium and buyers want more than sellers produce.
What is a shortage?
The three stages of production end with this phase, where production actually starts to decrease.
What is Stage 3?
This economic goal is often cited as a reason for implementing price controls.
What is making goods more affordable (or protecting producers)?
This shows the relationship between price and quantity demanded in table form.
What is a demand schedule?
This type of cost changes based on production levels, like raw materials or labor hours.
What are variable costs?
These act like signals in the economy, helping match buyers with sellers.
What are prices?
This is calculated by subtracting total cost from total revenue.
What is profit?
Double Jeopardy:
This can result from price ceilings on rental properties in expensive cities.
What are housing shortages?
This effect explains why people switch to alternatives as prices increase.
What is the substitution effect?
Double Jeopardy:
This point occurs when total revenue equals total cost.
What is the break-even point?
This term describes markets with many buyers and sellers, similar products, and freedom to enter and exit.
What are competitive markets?
This concept explains why adding more workers doesn't always increase production proportionally.
What is diminishing returns?
These are potential negative consequences of setting a minimum wage too high.
What is unemployment?