Economics chapter 4 and 5

46 terms by PaulNewcombe

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Demand falls () goods when income rises

normal goods

Ceteris Paribus

only takes factors to change into account

When prices rise() goods are purchased less.

normal

give examples of baby booms effect on demand

more diapers, more baby food

price increase

it reduces real income or buying power

What causes the demand curve to shift?

income level, consumer expectations, Population, consumer tastes and advertising

elasticity of demand

determines how a change in price will affect total income of a company

inelastic demand

price increases with no significant impact on buying habits

total revenue

amount of money companies receive for selling their goods or services

price increase

law of demand is the tendency of suppliers to offer more of a good

price

the greatest influence on the elasticity of supply

Goods with inelastic supply....

make producers supply more

difference between and individual and a market supply curve

one is for an individual business, market is on all companies that supply same product

list two examples of both fixed and variable costs

fixed-office, store, or restraunt
variable-producing more of something

most profitable level

producer has marginal costs equal to market revenue

Technology

lowers production cost

import technology

causes prices of goods to increase

subsides

as example of government influence on supply

know what factors cause the supply curve to shift

subsidies-gov. payment that supplies a business or market
taxes-tax on production or sale of a good
regulation-gov intervention in a market that effects the price, quality and quantity
future influences on supply-
number of supplies-

inelastic

type of demand in wich consumers keep buying a good despite a price increase

total revenue

amount of money a company receives by selling its goods

market supply schedule

lists the quantities of a good demanded by all consumers at each price that may be offered in the market

normal goods

type of good whose demand increases when income increases

demand

the way that consumers respond to price changes

elastic demand

type of demand in which consumers buy much less of a good after a small price increase

complements

two goods that are bought and used together

ceteris paribus

all other things held constant

substitution

when consumers react to a price rise of one good by consuming less of that good and more of another good in its place

inferior good

type of good whose demand falls when income increases

demand schedule

lists the quantities of a good demanded be a person at each price that may be offered in the market

demand curve

graphically represents the quantities of a good demanded at each price that may be offered in the market

law of supply

quantity of a good produced increases as the price rises

variable cost

any expence that rises or falls

resulation

government intervention that affects price, supply, or quality

measure of supplies elasticity

how suppliers respond to a price change

marginal revenue

when price is not under company control, the market price is equal to the marginal revenue

subsidy

government can provide support for a market using subsidies

supply schedule

the relationship between price and quantity supplied

marginal product of labor

output change from adding one more worker

total cost

variable and fixed expenses all together

quantity

amount of a good offered at a specific price

marginal cost

the additional cost of producing one more unit

fixed

costs that do not change

excise tax

gov. may tax the sale or manufacture of a good

supply curve

graph of the data points in a supply schedule

variable

a factor that can change

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