Revise later
SpaceTo flip
If confident
All Flashcards
Differentiate substitutes and complements.
Substitutes are used in place of each other; complements are used together.
What is the difference between normal and inferior goods?
Demand for normal goods increases with income; demand for inferior goods decreases with income.
Distinguish between movement along and a shift of the demand curve.
Movement along the curve is caused by price changes; a shift is caused by TBPIE factors.
Distinguish between movement along and a shift of the supply curve.
Movement along the curve is caused by price changes; a shift is caused by TPRENT factors.
How do changing tastes affect avocado demand?
If a health study praises avocados, demand increases.
How does a population boom affect housing demand?
More buyers in a city increase the demand for housing.
How does a coffee price decrease affect tea demand?
Demand for tea might fall if coffee (a substitute) becomes cheaper.
How does a peanut butter price decrease affect jelly demand?
Demand for jelly might rise if peanut butter (a complement) becomes cheaper.
How does rising income affect organic food demand?
Demand for organic food (a normal good) increases.
How does rising income affect instant noodle demand?
Demand for instant noodles (an inferior good) decreases.
How do expected price rises affect current demand?
Consumers increase current demand if they expect future price increases.
How do higher taxes affect supply?
Higher taxes decrease supply by increasing production costs.
How does technology affect supply?
Improved technology increases supply by improving efficiency.
How does a frost affecting coffee beans impact the coffee market?
A frost destroying coffee beans will decrease supply, increasing price.
What is the impact of taxes on supply?
Higher taxes decrease supply.
What is the impact of subsidies on supply?
Higher subsidies increase supply.
How does a tax on gasoline affect the gasoline market?
A tax on gasoline will decrease the supply of gasoline, leading to a higher equilibrium price and lower equilibrium quantity.
How does a subsidy for electric cars affect the gasoline market?
A subsidy for electric cars will decrease the demand for gasoline, leading to a lower equilibrium price and lower equilibrium quantity.