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46 terms

Economics chapter 4 and 5

STUDY
PLAY
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