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Chapter 3 Review Supply & Demand
What is a market: -an institution that brings together buyers and sellers.
Markets: -assume many buyers and many sellers of a standardized product.
The law of demand: -price and quantity demanded are inversely related.
The demand curve shows the relationship between: -price and quantity demanded.
Economists use the term demand to refer to: -schedule of various combinations of market prices and amounts demanded.
- The relationship between quantity supplied and price is _____ and the relationship between quantity demanded and price is _____. direct, inverse
What is the income effect? -when the price of a product increases, a consumer is able to buy less of it with a given money income.
A demand curve: -indicates the quantity demanded at each price in a series of prices.
The most important variable in determining the quantity demanded/supplied is: PRICE
Substitution Effect an increase in the price of a product will reduce the amount of it purchased because: consumers will substitute other products for the one whose price has risen Eg. Coke → Pepsi
The income and substitution effects account for the downward sloping demand curve
Complementary Goods goods that are used together with another good hot dog buns with hot dogs
Determinants of Demand Tastes Number of buyers Income- normal v. inferior goods (Independent goods) Prices of related goods Consumer expectations Substitute goods Complementary goods
Change in DEMAND versus change in QUANTITY DEMANDED
The law of supply producers will offer more of a product at high prices than they will at low prices
The supply curve shows the relationship between price and quantity supplied
Determinants of Supply Change in resource prices Change in technology Change in prices of other goods Change in producer expectations Change in the number of suppliers
Price Floor Rationale Impact result
Price Ceiling Rationale Impact result
The Market Structure. Markets are any place where transactions take place. It is an arrangement between buyers and sellers in order to exchange.
Individual Markets: Demand and Supply Chapter 3. Demand and Supply Market Any institution or system that brings together buyers and sellers of a particular.
Unit#2 NAME EconomicsDate/ Period Vocabulary Activity #1 Unit #2 1.Law of Demand-an increase in a goods price causes a decrease in quantity demanded 2.Purchasing.
PART TWO Price, Quantity, and Efficiency
Ch. 3: Supply and Demand: Theory
SUPPLY AND DEMAND I: HOW MARKETS WORK. Copyright © 2004 South-Western The Market Forces of Supply and Demand.
SUPPLY AND DEMAND: HOW MARKETS WORK
Demand, supply, and Market equilibrium
Turning in Chapter 3 homework Numbers 4, 8, 10, and 18 Theory in Action report.
Chapter 4 Demand, Supply, and Markets © 2009 South-Western/Cengage Learning.
Demand. Quantity of a product that buyers are willing and able to purchase at any and all prices Consumers are interested in receiving the most satisfaction.
Demand. Laugher Curve Q. What do you get when you cross the Godfather with an economist? A. An offer you can't understand.
Harcourt Brace & Company Chapter 4 The Market Forces of Supply and Demand.
The Market Forces of Supply and Demand
Demand, Supply & Market Equilibrium
Individual Markets: Demand & Supply 3 C H A P T E R.
3 - 1 Copyright McGraw-Hill/Irwin, 2002 Markets Demand Defined Demand Graphed Changes in Demand Supply Defined Supply Graphed Changes in Supply Equilibrium.
Supply & Demand using them to make decisions. Market… A buyer and seller coming together to exchange goods and services.
DEMAND AND SUPPLY MARKETS ARE MADE OF BUYERS (DEMANDERS) AND SELLERS (SUPPLIERS)
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