Macro assignment #1
what does the demand curve tells about the price that consumers are willing to pay
tells us the maximum that someone is willing ti pat for an additional unit of a good or service
the law of demand states that other things remaining the same,
the higher the price of good, the smaller the quantity demanded
equilibrium point shifts rightward and keeps the price the same but changes the quantity; caused by?
a rise in household income and a rise in the number of plantations
the rise of price of x means
an increase in quantity supplied and no change in supply supply doesn't change because the price changes, therefore it only changes the quantity of supplied
if demand and supply change in the same direction, we _______ the direction of change of the equilibrium quantity and we ______ the direction of change of the equilibrium price
can predict cannot predict
in a competitive market, prices are eventually driven down to zero. T or F
false
a competitive market DOES NOT
have to be a global market
competitive markets have (buyers)
many buyers
when the increase in demand is less than the decrease in supply, the equilibrium price ______ and the equilibrium quantity _______
rises decreases
when shortage arises, the price _____ to its equilibrium, which ______
rises decreases the quantity demanded and increases the quantity supplied
the opportunity cost x in terms of y
the number of Y things you must give up to get X y/x
the expected future price of an xbox one game falls
this decreases the demand for xbox one games future means no change right now and if there is a decrease that means the price is high right now
as the average income in china continues to increase, explain how the following will change: a. the demand for beef b. the demand for rice
we would expect the demand for beef to increase if it is a normal good and the demand for rice to decrease if it is an inferior good normal goods: increase with an increase in income inferior goods: decrease with an increase in income
if there is a change in price, there is a ___________ the demand curve if there is a different factor other than price changes, there is a __________ the demand curve
a movement along a shift back or forth
scarcity sentences are distinguished by
an or statement between two choices where you could do or get one or the other opportunity cost
taking a smartphone to the gym when you work out becomes more popular. what is the result of this event?
as a result, the demand for smartphone increases because when the thing becomes more popular, the demand changes right because more people are using them; only if there was a price change for the smartphones would it be a change in quantity demanded
Paula graduates from college and her income increases by 30,000 a year. nothing else changes. Paula decreases the quantity of t-shirts and pretzels that she buys and increases the quantity of coffee the she buys. for Paula,
coffee is a normal good normal goods = an increase in income causes an increase in the amount bought compared to inferior goods
bottled water and health clubs memberships are
complements they go hand in hand
pizza and sausage are __________. wheat and corn are _________
complements ( use one with the other) substitutes (grow one or the other)
a smartphone and a text message are _______. a text message and an email are _______
complements (one comes with the other) substitutes (send one or the other)
low-fat milk and cream are
complements in the production for a dairy and substitutes for consumers complements because they aren't the same product in production but they are two forms of dairy two different choices for consumers
an increase in the price of soap, a complement in production of palm oil, will ______ the equilibrium price of palm oil and _______ the equilibrium quantity of palm oil
decrease; increase
an increase in the price of a good
decreases the quantity of good demanded and results in a movement up along the demand curve for that good
when an event occurs that changes the demand for coffee makers, __________ if demand increases and ________ if demand decreases
demand curve shifts rightward when increasing demand curve shifts leftward when decreasing
surplus is when the price is above the ______; a surplus causes the price to
equilibrium price; fall to meet the equilibrium price
Competitive markets exist for
goods, services, money, factors of production, and inputs.
game consoles and games are complements. if the price of a game console decreases, how does the demand for games change? if the price of a game console decreases, the demand for games will
increase, and the demand curve for games will shift rightward increases because since they are complements, the decrease of price of one things causes the increase demand of its complement
as the market moves toward the equilibrium price, the quantity demanded _______ and the quantity supplied _______
increases because price becomes more easily doable and wanted more; decreases because the amount of supplies are lower
if the price of a printer rises from 40-80, while all other influences on selling plans are unchanged, the quantity of printers supplied
increases from 4-8 million price change = increase or decrease along the supply line and quantity demanded is changed
the market for tomatoes is a competitive market if
many people buy and many firms sell tomatoes, no single buyer or seller can influence the price people are competing to sell the best and hopefully cheapest to get the highest profits
competitive markets have (sellers)
many sellers
if the price of renting a dvd rises, a ______ the demand curve occurs. if any factor that influences buying plans other than the price changes, then a _____ the demand curve occurs
movement up along; shift of
If good A is a normal good and income increases, the equilibrium price of A ________ and the equilibrium quantity of A ________
rises increases
when the increase in demand equals the decrease in supply, the equilibrium price ______ and the equilibrium quantity ________
rises remains unchanged
when the increase in demand is greater than the decrease in supply, the equilibrium price _____ and the equilibrium quantity _______
rises increases
shortage vs price in regards to price, QS, and QD
shortage forces price and QS up and QD down surplus forces price and QS down and QD up
a demand curve that illustrates the law of demand
shows that the quantity demanded increases as the price falls
pasta and pizza are _______. a video game and a laptop are ________-
substitutes (eat one or the other) complements (use one with the other)
coal and oil are _______. a skateboard and roller blades are _______
substitutes (use one or the other) substitutes (ride one or the other)
diet coke and regular coke are
substitutes for consumers and substitutes in production for producers consumers can have one or the other producers are making the same type of product but in a different form
if as the price of a tank top increases, the quantity of t-shirts that firms plan to sell decreases, then tank tops and t-shirts are
substitutes in production when the price increases and quantity decreases = substitutes when the price increases and the quantity increases = complements
French fries and baked potatoes are
substitutes or substitutes in production it could be one or the other, and the production could go either way since they are the same product but in different forms
if the number of suppliers of sweaters decreases but all other influences on selling plans remain the same, then the supply curve would ________
supply would shift left
surplus vs. shortage
surplus will mean the price will decrease and qd will increase to meet equilibrium shortage means the price will increase and qd will decrease new equilibrium price will be below original for surplus and above original for shortage
why does the demand not change when the price of a good changes with no change in other influence on buying plans?
the demand of a good does not change when a change in price occurs
the price of a wireless plan rises. what is the effect on the price and quantity of smartphones
the equilibrium quantity of smartphones decreases and the price falls since the qd had to decrease because less people were buying at the higher price, so the price had to drop `
why is the price at which the quantity demanded equals the quantity supplied the equilibrium price?
the plans of producers and consumers are coordinated and there is no influence on the price to change
the relative price of a half gallon of milk is the opportunity cost because
the relative price tells us how many points of bananas we must give up to get a half gallon of milk
programmers who write code for Xbox one games become more costly to hire
this decreases the quantity demanded of xbox one game this would increase the price of the game which would increase quantity demanded because there is a price change
the number of people writing and producing Xbox one game increases
this event increases the quantity demanded of xbox games
the price of xbox on falls
this increases the demand for xbox one games overall price; not number of people; individual = QD; wide picture= D
General Motors cut is fourth-quarter production schedule by 10 percent because ford motor, Chrysler, and Toyota sales declined in August
this news clip illustrates a decrease in demand and a decrease in the quality supplied in the market or cars changes only the demand because the overall sales declined and not individual price changes the quantity supplied because the production schedule was cut down by a specific percent
the money price of a pound of bananas is 0.40$ and the money price of a half gallon of milk is 2.00$. the opportunity cost of a half gallon is milk is
5.00 points of bananas, which is the relative price of a half gallon of milk
quantity demanded vs. demand
QD: exact quantity (how much) of a good or service is demanded by the consumers at a particular price; actually amount of goods desired at a certain price D: the graphing of all the quantities that can be purchased at a different price