Flashcards
Econ December exams prep
Flashcards do conjunto (30)
- 1DemandThe quantity of a product that consumers are willing to buy at certain price in a given time period
- 2The law of DemandNegative/ Inverse relationship
- 3Non-price Determinants of DemandConsumer income, Prices of related goods,
income distribution, government policies, Taste/ Preference, Seasonal change, Population strucutre - 4SupplyThe quantity of a good that sellers are willing and able to supply at a given price in a given time period
- 5The law of supplyPositive/ Direct relationship
- 6The non-price determinants of SupplyCost of factors of production, other products producers can make, state of technology, future expectation, government intervention, seasonal changes
- 7Linear demand functionQd= a-bP
- 8Linear Supply functionQs= c + dP
- 9Equilibrium priceThe price that balances supply and demand
- 10Equilibrium quantityThe quantity that balances supply and demand
- 11ShortageWhen the price is below the Equilibrium price, the Quantity demanded exceeds the Quantity supplied
- 12SurplusWhen the price is above the equilibrium price, the quantity supplied exceeds the quantity demanded
- 13ElasticityElasticity is a measure of how much buyers and sellers respond to changes in market conditions
- 14PEDIts is a measure of how the quantity demanded of a good responds to a change in the price of that good
- 15Determinants of PEDNecessity vs. Luxury, the number of close substitutes, the time horizon and definition of the market
- 16Formula PED%change Od/%change of P
- 17Range of PEDmore than one elastic
less than one but not 0 inelastic - 18Total revenueamount paid by buyers and received by sellers of a good
- 19formula Total revenueTr= P x Q
inelastic demand-> Tr increases
elastic demand-> Tr decreases - 20XEDMeasures how much the Quantity demanded of one good responds to a price change of another good
- 21Formula of XEDXED= %change Qd of Product X/ %change in Price of Product Y
- 22Range of XEDgreater than 0= substitute relationship
Smaller than 0= complementary relationship - 23YEDMeasures how the quantity of a product responds to a change in consumers income
- 24Formula YEDYED= %change in Qd/ %change in income
- 25Range of YEDsmaller than 0= inferior good
greater than 0= normal good
smaller than 1= necessity (inelastic)
greater than 1= luxury good (elastic) - 26PESPES measures how the quantity supplied responds to a change in price of that good
- 27Ranges of elasticity of supplyPerfectly elastic Es= infinity
Relatively elastic Es greater than 1
Unit elastic Es=1
Relatively inelastic Es smaller than 1
Perfectly inelastic Es= 0 - 28Formula of PESPES= %change in Qs/ %change in Price
- 29Determinants of PESAbility of sellers to change amount of good they produce, Mobility of factors of production, Time period, Ability to store stock
- 30PES for CommoditiesInelastic supply
Manufactured goods more elastic
Informações
- Descrição
- Topic Demand and Supply, Equilibrium and Elasticity
- Criado por
- ji57ch22
- Visualizações
- 131
- Avaliação