BYUH Economics Chapter 3
change in quantity supplied
A change in price causes a movement along the supply curve
technology
A change in technology alters the combinations of inputs or the types of inputs required in the production process. An improvement in technology usually means that fewer and/or less costly inputs are needed. If the cost of production is lower, the profits available at a given price will increase, and producers will produce more. With more produced at every price, the supply curve will shift to the right, meaning an increase in supply.
inferior good
A good for which demand decreases when income increases
normal good
A good for which demand increases when income increases
change in quantity demanded
A movement along a demand curve that results from a change in price
change in demand
A shift in a demand curve
demand shifter
A variable that can change the quantity of a good or service demanded at each price
supply shifter
A variable that can change the quantity of a good or service supplied at each price is called a supply shifter
substitutes
If a reduction in the price of one good reduces the demand for another
In a competitive market, when price is below the equilibrium price, there will be pressure for the price to rise
True
model of demand and supply
demand and supply curves to explain the determination of price and quantity in a market.
supply schedule
The relationship between price and quantity supplied
demand schedule
is a table that shows the quantities of a good or service demanded at different prices during a particular period, all other things unchanged
factor markets
markets in which households supply factors of production—labor, capital, and natural resources—demanded by firms.
equilibrium price
Any market is the price at which quantity demanded equals quantity supplied. The equilibrium price in the market for coffee is thus $6 per pound.
change in supply
When we draw a supply curve, we assume that other variables that affect the willingness of sellers to supply a good or service are unchanged. It follows that a change in any of those variables will cause a change in supply, which is a shift in the supply curve.
supply curve
a graphical representation of a supply schedule. It shows the relationship between price and quantity supplied during a particular period, all other things unchanged.
Technology is a demand shifter
false
complements
if a reduction in the price of one good increases the demand for another
law of demands
or virtually all goods and services, a higher price leads to a reduction in quantity demanded and a lower price leads to an increase in quantity demanded.
shortage
the amount by which the quantity demanded exceeds the quantity supplied at the current price.
surplus
the amount by which the quantity supplied exceeds the quantity demanded at the current price.
quantity demanded
the quantity buyers are willing and able to buy at a particular price during a particular period, all other things unchanged.
equilibrium quantity
the quantity demanded and supplied at the equilibrium price. At a price above the equilibrium, there is a natural tendency for the price to fall. At a price below the equilibrium, there is a tendency for the price to rise.
quantity supplied
the quantity sellers are willing to sell at a particular price during a particular period, all other things unchanged
The principle stating that, for virtually all goods and services, there is a negative relationship between price and quantity demanded, all other things unchanged, is the law of demand.
true
demand curve
which is a graphical representation of a demand schedule. A demand curve thus shows the relationship between the price and quantity demanded of a good or service during a particular period, all other things unchanged.
