supply
what is supply
quantity of goods and services that producers are
willing to offer at various prices during a given time period
what is demand
The amount of a good or service that a consumer is willing and able to buy at various possible prices during a given period of time.
what does participating in the markets do
it increases choices available in those markets
what is specialization
method of production whereby an entity focuses on the production of a limited scope of goods to gain a greater degree of efficiency.
when does market equilibrium occur
when quantity supplied and quantity demanded for a product are equal
law of supply
Producers supply more goods and services at higher prices and fewer goods and services at lower prices
three economic concepts that help explain law of demand
income effect, substitution effect, diminishing marginal utility
what is one of the price systems biggest strengths
its ability to deal with change
what is division of labor
the assignment of different parts of a manufacturing process or task to different people in order to improve efficiency.
when does surplus occur
when quantity supplied is greater than quantity demanded
The three main government tools are:
Taxes, Subsidies, regulation
what is demand schedule
list the quantity of goods that consumers are willing and able to buy at a series of possible prices
benefits of the price system
provides information, incentives, choice, efficiency, flexibility
a price ceiling is
limit of how high you can set a price
shortage occurs when
quantity demanded exceeds quantity demanded
what does technology do to production
makes production more efficient and less expensive
types of related goods
substitute goods, complementary goods
limits of the price system
externalities, public goods, instability
a price floor is
limit of how low companies can set a price
cons to the rationing system
unfair, expensive, creates black markets
what does competition do to supply
Competition tends to increase supply while lack of competition tends to decrease supply
what is elasticity of demand
The degree to which changes in a good’s price affect the quantity by consumers
any good or service that is consumed by all members of a group
what is price elasticity
measure used in economics to show the responsiveness, of the quantity demanded of a good or service to a change in its price.
when either the demand or the supply shifts
the supply curve shifts