Slay's Supply & Demand Test
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44 terms
Terms | Definitions |
|---|---|
 What are 2 parts of a price driven economy? | supply and demand |
| Supply | the amount a seller is willing to sell at different prices at a particular place in time |
| Schedule | always looks at price and quantity |
| Law of Supply | as price goes up, quantity goes up |
| Curve | Line graph showing supply or demand |
| Elasticity of Supply | The change in supply following a change in price |
| Inelastic Elasticity of Supply | Where there is a small change in supply based on a change in price |
| Elastic Elasticity of Supply | Where there is a big change in supply following a change in price |
| Perfectly Inelastic Elasticity of Supply | No change in supply regardless of a change in price. |
| Non-Price Determinant of Supply | Where I change something other than price |
| The lower my supply | If I shift my curve to the left: |
| If I shift my curve to the right: | The higher my supply |
| 4 Non-Price Determinants of Supply | 1. Change in the number of producers 2. Other profit opportunity 3.Change in production cost 4. Future Expectations |
| Adam Smith | Wrote the Wealth of Nations |
| laissez-faire | What is the basic idea of The Wealth of Nations? |
| laissez-faire | leave it alone |
| Infrastructure | basic services that hold a country together |
| Invisible hand | government is involved with just the economy |
| Monopoly | trust, control a market, efficient way to control an industry, don't have to worry about duplication |
| Sherman Anti-Trust Act | illegal to restrain trade in any way |
| Clayton Anti-Trust Act | (1914) Made monopolies illegal |
| Market Structures | How we organize business |
| Demand | The ability AND willingness to buy |
| Law of Demand | as price goes up, demand goes down |
| Elastic Elasticity of Demand | A large change in price following a change in demand |
| Inelastic Elasticity of Demand | A small change in demand following a change in price (usually essential) |
| 7 Non-Price Determinants of Demand | 1.Substitute goods 2.Cost of a complimentary good 3.Change in income 4.Change in taste 5.Change in weather 6.Change in the number of buyers 7.Future Expectations |
| Equilibrium Point (E1) | All goods offered for sale at that price are sold at that price. (Where S1 and D1 meet) |
| 4 Types of Market Structures | 1.Perfect Competition 2. Pure Monopoly 3. Monopolistic Competition 4. Oligopoly |
| Perfect Competition | buying and selling without limits |
| Pure Monopoly | One provider. If you want the product you will go to that store |
| Monopolistic Competition | You buy the same thing over and over because you're used to it |
| Name Brand Loyalty | You only use a specific brand |
| Oligopoly | A few firms control the market |
| Non-price Competition | Advertising something other than price |
| Characteristics of a Perfect Competition | 1.Many buyers are sellers 2.Goods and services are similar or identical 3.Consumer knowledge of product 4. Easy entry and exit to market |
| Characteristics of a Pure Monopoly | 1.Products are unique 2. Extremely difficult entry and exit to market 3. One provider for the most part |
| Monopolies are illegal except these 4: | 1. Government Monopoly 2. Natural Monopoly 3. Technological Monopoly 4. Geographical Monopoly |
| Government Monopoly | Highway system and water supply |
| Natural Monopoly | Most efficient way to deliver goods or services |
| Technological Monopoly | You came up with an idea for a product and you get a patent, no one else can produce that product |
| Geographical Monopoly | No one else in the area has it |
| Characteristics of a Monopolistic Competition | 1. Many buyers and sellers 2. Similar but differentiated products 3. Consumer knowledge is good 4. Entry and exit is relatively easy to market |
| Characteristics of a Oligopoly | 1. 3 or 4 firms control 70% of the market 2. Similar products differentiated through advertising 3. Information is available 4. Barriers to entry and exit to market (usually expensive) |
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