Exam 1 review Flashcards Preview

ECON 2106 > Exam 1 review > Flashcards

Flashcards in Exam 1 review Deck (29)
Loading flashcards...
1

What are factors that influence producer's behavior?

Price of Products, Price of inputs, Technology, Gov. Taxes/Subsidies, and Expectations of future prices

2

What results in a movement along the supply curve?

Changes in price

3

What is a movement along the supply curve?

A change in quantity supplied

4

Changes in variables held constant result in what kind of change to the supply curve?

A shift in the supply curve

5

What does a shift in the supply curve represent?

A change in supply

6

As price of inputs rise, quantity supplied ___?

Falls

7

As price of inputs fall, quantity supplied ___?

Rise

8

Losing a subsidy ____ profit opportunities.

Shrinks

9

As gov. taxes rise, supply ___?

Falls

10

An outward shift in supply represents ___

Growth

11

An inward shift in supply represents ___

Recession

12

Expectations about lower future prices cause supply to ___.

Rise

13

What is the market supply curve?

A horizontal summation of all the individual curves in the market.

14

A shift in an individual supply curve will also cause a shift in the market ___ curve?

Demand

15

Market supply is based on ____.

Individual supply

16

Anything that shifts individual supply also shifts ___.

Market Supply

17

What is competitive equilibrium?

When quantity supplied is equal to the quantity demanded

18

Equilibrium is defined in economics as?

A situation from which there is no tendency to change behavior.

19

What is excess demand?

Quantity demanded exceeds quantity supplied

20

What is a bidding mechanism?

A process by which unsatisfied buyers try to change the price of a good in order to guarantee that they are able to obtain it.

21

What is equilibrium price?

QS = QD

22

What is excess supply?

Quantity supplied exceeds quantity demanded.

23

What is a shortage?

Quantity supplied exceeds quantity demanded.

24

The first step to finding a new equilibrium when a demand determinant changes is?

Identify which side of the market is affected

25

What is the second step in finding a new equilibrium when a demand determinant changes?

Identify how it will affect the curve

26

What happens to the equilibrium when a substitute good's price increases?

The bidding mechanism bids up

27

When a substitute good's price rises, is there excess demand or supply?

Excess Demand

28

If the price of bagels (which are substitute goods for bread) rises, what happens to the bread market?

It grows due to increasing demand

29

What does Comparative statics mean?

Comparing one state with another