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Demand
Supply
Elasticity
Supply and Demand
Definitions you should know
100
If you raise the price of Coke, what happens in the Coke market?
Quantity Demanded of coke moves down along the curve.
100
When the number of sellers increases, what happens to supply?
Supply shifts to the right, or increases.
100
Give me the four determinates of what makes something elastic. (look in notes)
1) Price elasticity is higher when close substitutes are available. 2)Price elasticity is higher for narrowly defined goods than for broadly defined ones. 3)Price elasticity is higher for luxuries than for necessities. 4) Price elasticity is higher in the long run than the short run.
100
A new study comes out that Orange Juice corrodes your teeth, and there was a horrible disease killing all oranges making them 10 times more expensive. What happened to price and quantity?
Price- Indeterminate Quantity- goes down
100
What is Economics?
The study of how society allocates its scarce resources.
200
If your income increases what happens in the market to ground beef (assuming it is an inferior good)?
The Demand curve will shift down or to the left.
200
When the input price increases for a product, and the price of that product decreased. What happens to supply?
Supply shifts to the left or decreases with the input price increasing, and quantity supplied decreases.
200
What is the Price elasticity of demand formula?
Price elasticity of demand= Percentage change in Qd / Percentage change in P
200
You have won a million dollars, and the price of parts to make a Lamborghini goes up. What happens to price and quantity in the Lambo market?
Price- goes up Quantity- is indeterminate
200
What is opportunity cost?
The next highest value of what you must give up to attain something.
300
A new study has released that consuming Peanut Butter can cause horrible hideous hives, and the price of Jelly increases. What happened in the market for Peanut Butter with each of these instances? What shifters are these?
Hives= the demand curve will shift left. This is a Taste shifter. Jelly= this will also shift the demand curve to the left. This is a compliment shifter.
300
When the price of gas goes up, what happens to the supply of the electric car market?
Nothing silly these are substitutes, so this is a demand shifter. duh.
300
What does perfectly elastic and perfectly inelastic demand curves look like?
P inelastic- straight up and down P elastic- straight side to side
300
the price of milk goes up, the price of girl scout cookies goes down, and benefits for Oreo factory workers are cut. What happens to price and quantity in the Oreo market?
Price- goes down Quantity- is indeterminate
300
What is an Incentive?
something that induces a person to act, i.e. the prospect of a reward or punishment.
400
1)Price of Pepsi went up 2)Coke has been linked to heart attacks 3)your income has increased and Coke is a normal good 4)the price of Coke has increased. What happens in the market of Coke for each of these situations?
1) the demand for Coke shifts to the right or increases. 2) the demand for Coke shifts to the left or decreases. 3) the demand for Coke increases or shifts to the right. 4) the QUANTITY demanded for Coke decreases.
400
The price of oranges increases, and the number of sellers in the market for Orange juice decreased, what happened to supply?
Supply shifts to the left or decreases for both.
400
What numerical value is considered elastic and what is unit elastic?
Unit elastic is = to 1 Elastic is anything over 1
400
Suppose the income of buyers in a market for an inferior good decreases and a technological advancement occurs also. What would we expect to happen in the market?
Quantity- would increase. Price- indeterminate
400
What is the law of demand and the law of supply?
D- When the price of a product increases the quantity demanded of that product decreases. S-When the price of a product increases the quantity supplied of the product increases.
500
What is the difference between QUANTITY demanded versus just demand? Give an example of when they change.
When the price of a product itself changes the quantity demanded of that product changes. This change takes place along the curve. When Demand changes it moves the entire line (demand shifters).
500
How much do you love economics?
The answer doesn't matter you're still here.
500
Why is elasticity important? What does it measure? Give me an example
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500
Give me an example of when the price would increase but quantity would be indeterminate.
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500
What is elasticity? Give me an example of something that is elastic and something relatively inelastic.
is a numerical measure of the responsiveness of Qd or Qs to one of its determinants. Snickers are elastic, and Insulin is inelastic.