DEMAND
What kind of relationship is the law of demand? (between price and quantity demanded).
Inverse
What kind of relationship is the law of supply? (between price and quantity supplied)
Direct relationship (same)
When quantity supplied is greater than quantity demanded. What is this?
Surplus
A payment from the gov to a business that offsets the cost of production is a _______.
Subsidy
2 Parts: What is a substitute? What is a complement?
Sub: Use instead
Comp: Use together
What way does the demand curve slope?
Downward Sloping
What way does the supply curve slope?
Upward slope
When quantity demanded is greater than quantity supplied.
Shortage
2 part: What is a price ceiling? What is a price floor?
Price ceiling=legal maximum price on a good/service
Price floor=legal minimum price on a good/service
What happens in a market when a tax is placed on producers?
Supply decreases. What happens to price?
2 parts: What is an inferior good? What is a normal good?
Inferior: A good that is less desired. Higher demand as income decreases. Ex: ramen noodles
Normal: a good that is more desired. Higher demand as income increases. Ex: luxury items, higher quality, jewelry, clothes, cars
If there is a decrease in quantity supplied, is there a movement or a shift? Which direction?
Movement down on the supply curve.
What is the difference between elastic and inelastic goods?
Elastic=sensitive to price
Inelastic=insensitive to price
What is a perfect competition?
Many small firms competing to sell the same/similar products. Ex: farmers selling strawberries in a market.
Producing large amounts decreases price per unit. What is this called?
Economies of scale
What is the substitution effect?
Swapping out a product for a cheaper alternative.
T or F: Any point on a Supply and Demand Graph that is not directly on the equilibrium point is known as disequilibrium.
True
T or F: States can choose to pay a minimum wage that is higher than the federal minimum wage.
True
3 part: What is a monopoly? What is an oligopoly? Give an example of each.
Monopoly= 1 firm dominating the market; ex: Santee Cooper
Oligopoly: Fewer than 10 firms dominating the market; ex: phone providers like Tmobile, Verizon, AT&T
2 part: What is an example of a fixed cost? What is an example of a variable cost?
Rent; Raw materials
The ____ effect occurs when a consumer is limited by the money they have in their budget.
Income
Name one shifter of supply.
Future expectations
Describe the inventory of a business.
The quantity of goods that a firm has on hand
Rank the market structures from MOST to LEAST competitive.
Perfect comp, monopolistic comp, oligopoly, monopoly
List the 4 business structures discussed in class and what they are.
Sole proprietorship: One owner in control, unlimited liability
Partnership: two or more people in control of the business, gen partnership, LLP, etc.
Corp: owned my stockholders
Multinational