Supply & Demand ~ Slay
|Supply-||the amount a seller is willing to sell at different prices at a particular place and time.|
|What is the supply schedule always going to look at?||price and quantity.|
|Curve-||line graph showing supply or demand.|
|Law of supply-||as price goes up, supply goes up.|
|Elasticity of supply-||change in supply following a change in price.|
|3 types of elasticity of supply?|| 1. inelastic.|
3. perfectly inelastic.
|Inelastic (supply)-||small change in supply following a price.|
|Elastic (supply)-||big change in supply following a change in price.|
|Perfectly inelastic (supply)-||no change in supply regardless of a change in price.|
|Non-price determinant (supply)-||changing something other than price.|
|4 non-price determinants (supply)?|| 1. change in the number of producers.|
2. other profit opportunity.
3. change in production cost.
4. future expectations.
|Demand-||ability AND willingness to buy.|
|Law of demand-||as price goes up, demand goes down.|
|Elasticity of demand-||change in demand following a change in price.|
|2 types of elasticity of demand?|| 1. inelastic.|
|Inelastic (demand)-||small change in demand following a change in price.|
|Elastic (demand)-||big change of demand following a change in price.|
|Non-price determinant (demand)-||shifts the curve.|
|7 non-price determinants (demand)?|| 1. price of substitute goods.|
2. cost of a complimentary good.
3. change in income.
4. change in taste.
5. change in weather.
6. change in number of buyers.
7. future expectations.
|Surplus-||too much of something.|
|Shortage-||didn't produce enough.|
|Equilibrium point-||all goods offered.|
|Market structures-||how we organize business.|
|4 types of market structures?|| 1. perfect competition. |
2. pure monopoly.
3. monopolistic competition.
|Perfect Competition-||buy and sell without limits.|
|4 characteristics of perfect competition?|| 1. many buyers or sellers.|
2. goods and services are similar or identical.
3. consumer has knowledge of product.
4. entrance to and exit from market are easy.
|Pure monopoly-||one provider.|
|3 characteristics of pure monopoly?|| 1. product is unique. |
2. entrance to and exit are extremely difficult.
3. only one provider.
|Monopoly is mostly _______ in the US.||illegal.|
|4 legal monopolies?|| 1. government.|
2. natural monopoly.
|Monopolistic competition-||buying something where you've always boughten it.|
|4 characteristics of monopolistic competition?|| 1. many buyers and sellers.|
2. similar but differentiated product.
3. consumer knowledge is good.
4. entrance to and exit are relatively easy.
|Oligopoly-||a few firms control the market.|
|5 characteristics of oligopoly?|| 1. 3 or 4 firms control at least 70% of market.|
2. similar products differentiating through advertising.
3. information is readily available.
4. barriers to enter and leave market.
5. non-price competition.
|Who wrote the wealth of nations?||Adam Smith.|
|What is the basic idea of the wealth of nations?||laissez-faire.|
|Laissez-faire-||leave it alone.|
|What did Smith say?||government should stay out.|
|Infrastructure-||basic services that holds a country together.|
|Invisible hand-||contains infrastructure and government is involved with just the economy.|
|What occurred in the late 1800's?||monopolies formed.|
|Monopoly-||where I control production.|
|Sherman Anti-Trust Act-||illegal to restrain trade in anyway.|
|Clayton Anti-Trust Act-||1914, made monopoly illegal.|