Terms
The willingness and the ability to purchase something
Demand
As price increases, what will decrease?
QUANTITY Demanded
Any point below the equilibrium price will result in a...
Shortage
The money you make before taking out your own costs is referred to as...
Revenue
If a product has a price elasticity quotient less than one, it is considered...
Inelastic
This tells us that as price increases, quantity supplied will also increase
Law of Supply
This idea tells us that prices generally will work toward equilibrium (as if guided by a…)
Invisible Hand Theory
Any price above the equilibrium price will result in a...
Surplus
Carlisle sold seventy ducks at $0.50 a piece. What is his revenue?
$35
Which of the following goods would most likely be the most inelastic?
Ice cream
Medicine
DVDs of Shrek 3
Medicine
When two goods go together, they are said to be these types of goods
Complementary
This would be the most efficient point in a market because supply and demand are equal
Equilibrium (Point)
The equilibrium point is the most efficient point in a market because...
Quantity demanded and quantity supplied is equal, meaning there will be no shortage nor surplus. A similar answer is also acceptable.
Justine bought three water bottles for $6 each. She then sold them for $6.50 each. What is her profit?
$1.50
To find the percentage change in either the price or quantity demanded of a good, one only needs to...
Find the absolute value of the difference between the old and new quantities and divide by the old one
Any point above the equilibrium price will result in more supply than demand, called a...
Surplus
Legos go on sale. What will happen to the equilibrium price for Legos rival “Brick Building Sets”?
Decrease due to substitute goods
Give me one scenario that would increase the equilibrium price of hot dogs
The formula for finding profit is...
Revenue (money earned) minus costs
If something has a price elasticity of demand quotient of one, it’s referred to as...
Unitary elastic
How responsive people are to changing prices of any given product is called...
Price Elasticity of Demand
I’m a hummus seller and I think prices are going to go up next week. What will happen to the supply of hummus for this week?
Decrease due to future expectations
Give me one scenario that would decrease the equilibrium price of hot dogs
Hamburgers go on sale; new science shows how bad hot dogs are for you; overpopulation of pigs on farms; etc.
John bought 5 DVDs of Shrek 3 for $100 total. He then sold each one for $15 each. Calculate John’s profit or loss.
-$25
Find the price elasticity of demand quotient for the table below
OLD: QD = 80, price = $5
NEW: QD = 75, price =$10
.06