Vocabulary
What is elasticity of demand?
The supply curve shifts to the left when this happens.
What is when supply decreases?
The following happens when there is too much supply and not enough demand.
What is a surplus?
These are products that are often purchased together, whose demand is strongly tied together to one another.
What are complements?
The pricing of a good is a reflection of these two factors.
What is the supply and demand?
This states that as the prices of goods rises, the quantity demanded will fall.
What is the law of demand?
This shift is occurring in the blue graph.
What is an increase in demand?
The payment a government gives to businesses in order to boost supply.
What is a subsidy?
If a product has elastic demand, and the price of a good goes up, consumers will...
What is wait to purchase the good, or substitute it for something else?
True or False: A rise in prices is unfair!
What is false?
This is the meeting point where supply and demand meet each other.
What is the equilibrium?
This happens to pricing in the blue graph as a result of a shift.
What is price increases?
The drop in price will result in less of an item being produced.
What is the law of supply?
When there is higher demand for a good, then supply, this will occur.
What is a shortage?
This is a characteristic of pricing.
Possible answers: What is a signal? What is easily understandable (intuitive)? What are neutral? What is a result of supply and demand? What is flexible?
This can happen when the price of goods increases and you feel poorer.
What is the income effect?
This shift is happening in the green graph.
What is a decrease in supply?
When measuring the elasticity of supply, these are perhaps the most important two factors.
What is time and complexity in the production process?
These are three most important questions when determining whether a good has elasticity of demand.
What is, can the purchase be delayed, are there substitutes, and does it make up a large percentage of consumer's income?
This happens to price when there is a surplus.
What is decrease?
This is a government regulation that places a minimum on something (i.e. minimum wage).
What is a price floor?
This happens to price as a result of the supply shift.
What is an increase in price?
Regulation often has this effect on supply.
A government regulation that is meant to fix high demand for housing.
What is rent control?
This happens to price when there is a shortage.
What is an increase?