All Flashcards
What is the definition of the demand curve?
The total of all individual demands at various price points.
What is the Law of Demand?
As price increases, quantity demanded decreases, and vice versa.
What is the definition of the supply curve?
The sum of all individual suppliers at different price points.
What is the Law of Supply?
As price increases, quantity supplied increases, and vice versa.
What is quantity demanded?
A specific point on the demand curve (the x-value). It changes when price changes.
What is quantity supplied?
A specific point on the supply curve (the x-value). It changes when price changes.
What is 'demand'?
Refers to the entire demand curve. It shifts due to factors other than price.
What is 'supply'?
Refers to the entire supply curve. It shifts due to factors other than price.
What is market equilibrium?
The point where the supply and demand curves intersect; quantity demanded equals quantity supplied.
Define equilibrium price and quantity.
The price and quantity at the intersection point of the supply and demand curves.
Analyze the graph of a demand curve shifting to the right.
Indicates an increase in demand at every price point.
Analyze the graph of a supply curve shifting to the left.
Indicates a decrease in supply at every price point.
What does a movement along the demand curve indicate?
A change in quantity demanded due to a change in price.
What does a movement along the supply curve indicate?
A change in quantity supplied due to a change in price.
Analyze a graph showing a surplus.
The quantity supplied is greater than the quantity demanded at the given price.
Analyze a graph showing a shortage.
The quantity demanded is greater than the quantity supplied at the given price.
What happens to the equilibrium price and quantity when demand increases?
Both the equilibrium price and quantity increase.
What happens to the equilibrium price and quantity when supply decreases?
The equilibrium price increases, and the equilibrium quantity decreases.
How does a price floor above the equilibrium price appear on a supply and demand graph?
It is a horizontal line above the equilibrium point, creating a surplus.
How does a price ceiling below the equilibrium price appear on a supply and demand graph?
It is a horizontal line below the equilibrium point, creating a shortage.
How does the Law of Demand apply to gasoline prices?
If gasoline prices increase, consumers will likely buy less gasoline.
How does the Law of Supply apply to wheat production?
If the price of wheat increases, farmers will likely produce more wheat.
How does a change in consumer income affect the demand for luxury cars?
An increase in consumer income will likely increase the demand for luxury cars, shifting the demand curve to the right.
How does a technological improvement in manufacturing affect the supply of smartphones?
A technological improvement will likely increase the supply of smartphones, shifting the supply curve to the right.
How does an increase in the price of coffee affect the demand for tea?
An increase in the price of coffee will likely increase the demand for tea, shifting the demand curve for tea to the right.
How does a shortage of labor affect the supply of agricultural products?
A shortage of labor will likely decrease the supply of agricultural products, shifting the supply curve to the left.
How does a price ceiling on rent affect the quantity of apartments supplied?
A price ceiling below the equilibrium price will likely decrease the quantity of apartments supplied, leading to a shortage.
How does a price floor on milk affect the quantity of milk demanded?
A price floor above the equilibrium price will likely decrease the quantity of milk demanded, leading to a surplus.
How does a change in consumer tastes affect the demand for vinyl records?
If consumer tastes shift towards vinyl records, the demand for vinyl records will increase, shifting the demand curve to the right.
How does a tax on cigarettes affect the supply of cigarettes?
A tax on cigarettes will likely decrease the supply of cigarettes, shifting the supply curve to the left.