Definitions
Inverse relationship between P and Q
Law of Demand
It is said that Banana Prices go up next week
Future Expectations
Equilibrium is when _____ =_____
Qd=Qs
Supply shifted to the left
What happened to P and Q?
P:__
Q:___
P increased
Q fell
Price floors cause a _______
Price ceilings cause a ______
surplus, shortage
goods used in place of one another
substitute goods
The price of leather has gone up (Leather covered books)
Price/availability of resources
Demand is _________ sloping
Supply is ___________ sloping
downward, upward
Demand increased
What happened to P and Q?
P:__
Q:___
P increased, Q increased
Purpose of a Excise tax
To have producers make less of a good
A good that when income increases, demand of that good increases
Normal goods
A famous celerity endorses chicken wings (Chicken wings)
taste and preferences
How does my graph shift? _____ shifts to the ______
Doctors say trans fat is bad for your health (KFC)
Demand, left
Demand shifted to the left
What happened to P and Q?
P:__
Q:___
P fell, Q fell
Purpose of a subsidy
to have producers make more of a good
Maximum legal price a seller can charge for a product
Price ceiling
price of hamburgers fall (hamburgers)
NO SHIFT
How does my graph shift? _____ shifts to the ______
Margarine increased their prices (Butter)
Demand, right
Supply shifted to the right
What happened to P and Q?
P:__
Q:___
P fell Q increased
Gas, Milk, Toilet paper are goods that have _________ demand curve
inelastic
Quantity is insensitive to change in price
inelastic
It is predicted that profits will increase in two days (Hamburgers)
Expectation of future Profit
How does my graph shift? _____ shifts to the ______
A storm causes cheese to be lost at sea (Pizza)
supply, left
Assume that Supply increased and demand increased for cars. What happened to P and Q?
P:______
Q:________
price indeterminate
Q increased
What is my per unit tax price and revenue for government if:
After tax Price is 6$ and Quantity is 60
Original EQ price is 5$ and EQ Quantity is 90
and sellers only get 4$
2$, 120