Show:
Demand & Supply
Demand & Supply Shifters
Elasticity & Random
Equilibrium & Prices
Market Structures
100
What is supply?
Amount of goods and services that sellers are willing and able to sell in the marketplace at various prices.
100

Name 2 supply shifters.

The cost of inputs, Technology, Producer expectations, the number of sellers, Natural Disasters, government policy

100

Do economics and government relate/overlap?

Yes!

100

Where is the equilibrium point?

The intersection of supply and demand curves (the kiss)

100

What is a market?

Any place buyers and sellers come together to exchange goods and services

200
What is the Law of Demand?
As price increases, quantity demanded decreases and vice versa
200

If a curve shifts right, it is...

increasing
200

What does a demand curve look like? (show me with your arms)

Slopes downward.

200

What is equilibrium?

Where demand = supply

200

Who sets the price in perfect competition?

The market makes the price, the firms have no control because they are all selling an identical product

300
What is the law of Supply?
As price increases, the quantity supplied increases and vice versa.
300

What are complementary goods?

Goods that you buy together (Peanut butter and jelly, pasta and sauce)

300

What is an example of a black market?

Elephant tusks, drugs, exotic pets, weapons, etc.
300

What are 2 examples of the government setting a price control?

Price floor: minimum wage

Price ceiling: rent control

300

Give 1 example of a legal monopoly.

Resource monopoly: stone, mining

Government-created: patents, licenses, franchise

Natural monopoly: gas, water, electric (more efficient having 1 person produce)

400
Why does a supply curve slope upward?
Prices and quantity supplied are positively related. As one increases, so does the other one.
400

What will happen to the demand of Nike shoes if it is the shoe used by many famous athletes?

Demand will increase/shift to the right (Demand Determinant: Change in taste/preference)

400

What is elasticity?

Measure of responsiveness/sensitivity to changes in price

400
The price of donuts falls below equilibrium? What do we call this?
A shortage
400

What are the two market structures that have LOW barriers to entry and are therefore very competitive

Perfect competition & Monopolistic competition

500

What happens to the demand curve when a change in price occurs?

The curve does NOT shift; there is only a movement along the curve

500

What will happen to the supply and/or demand of coffee if the cost of coffee beans increases?

The supply of coffee will decrease/shift to the left (Supply Determinant: Cost of inputs)

500

Why are toothbrushes, gasoline, deodorant, and life-saving drugs inelastic?

We will demand the same quantity at ANY price. We do not respond to changes in price because we still need to buy it.

500

What is a surplus? Where is it in relation to equilibrium?

A surplus is when we have more products than what is needed. A surplus can be found at any price point above equilibrium.

500

How is a cartel different from collusion?

Cartel: an organization that is established to set prices/production

Collusion: companies that agree to set prices/production