Supply
With law of supply, as prices rise quantity supplied _____, while as price falls, quantity supplied ______
What is rises and falls
With law of demand, as prices fall, quantity demanded goes ______ while as prices rise, quantity deamnded goes ______
What is up and down?
This has a direct relationship with income
What is a normal good
This point is when the demand and supply graphs meet
What is Market Equilibrium
Elasticity measures how much a change in price affects this.
What is demand?
This is a movement along a supply line rather than a movement of the supply line
What is a change in quantity supplied?
This effect is when prices rise for a product, so people buy a cheaper, similar product instead
What is the substitution effect?
Ramen, store-brand food, or used cars are all examples of this type of good
What are inferior goods?
This is what happens when the quantity supplied is more than the quantity demanded.
What is a shortage?
If the demand for a product doesn't change as the price changes, then that product is
What is inelastic?
There are two types of government actions that affect supply, _____ has an inveserse relationship with supply while _____ has a direct relationship with supply
What are Taxes and Subsidies?
With each purchase, satisfaction decreases. This is an example of what effect?
What is diminishing marginal utility
If more Toyotas are bought as the national income rises, Toyotas are considered....
What are normal goods?
On a supply and demand graph, when the price is set above the equilibrium point, this happens.
What is a surplus
Items like luxury cars, gaming consoles, and designer bags are elastic or inelastic?
What is Elastic?
This is what happens when the costs of inputs increase
What is a supply decrease?
With normal goods, as incomes rises _______ rises, and as income falls ______ falls
What is Demand rises, demand falls
If a person buys less instant ramen and more steak as their income increases, instant ramen is considered this type of good.
What is an inferior good
When the government sets a price ceiling below the market equilibrium, this results, since the quantity demanded is greater than the quantity supplied.
What is a shortage?
Gasoline usually has this type of demand because people still buy about the same amount even if the price rises.
What is inelastic demand?
A price change = ____________ _______ while a change in a determinant = ___________ __________
What is Quantity supplied and Supply
When price changes, the ________ _______ changes, while when a determinant changes, the ________ changes
What is quantity demanded and demand
After getting a raise, Maria switched from taking the city bus to driving her own car to work. For Maria, bus rides are considered this type of good.
What is an inferior good?
If the government sets a price ceiling above the market equilibrium, the ceiling has this effect on the market.
What is no effect?
A store raises the price of a luxury handbag by 10%, and quantity demanded falls by 20%. The demand for handbags is considered this type of elasticity.
What is elastic demand