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47 Cards in this Set
- Front
- Back
grp of buyers and sellers w/ the potential to trade w/ each other
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market
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model that shows how goods, resources, and dollar payments flow btwn household and firms
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circular flow
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markets in which firms sell goods and services to households
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product markets
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markets in which households that own resources sell them to firms
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resource markets
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markets in which no buyers or sellers have the power to influence price
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perfectly competetive markets
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amt of a good that all buyers in a market would choose to buy during a per of time, given their constraints
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quantity demanded
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changes along the demand curve
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changes in quantity demanded
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as the price of a good increases the quantity demanded decreases
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law of demand
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due to change in diff variables
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change in demand
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causes movement along the demand curve
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change in the price of a good
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Factors that shift the demand curve
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1) Income
2) Wealth 3) Prices of related goods 4) Population 5) Expected price 6) Tastes/preferences |
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good that people demand more of as their income rises
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normal good
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good that people demand less of as their income rises
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inferior good
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own-owed
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wealth
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good that can be used in place of some other good that fulfills similar purpose
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substitute
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good that is used together w/ some other good
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compliment
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increase in income will shift curve right for this type of good
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normal good
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increase in income will shift curve left for this type of good
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inferior good
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increse in wealth will shift curve right for this type of good
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normal good
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increase in wealth will shift curve left for this type of good
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inferior good
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rise in the price of a substitute
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demand curve shifts right
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fall in the price of a substitute
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demand curve shifts left
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rise in price of a compliment
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shifts demand curve left
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1) population increase
2) rise in the price of s substitute 3) expected rise in price 4) increase in income (in relation to a normal good) 5) increase in wealth (in relation to a normal good) |
demand curve shifts right
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1) fall in the price of a substitute
2) expected fall in price of the good 3) increase in income (in relation to an inferior good 4) increase in wealth (in realtion to an inferior good) |
demand curve shifts left
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expectation that price of the good will rise
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demand curve shifts right
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expectation that the price of the good will fall
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demand curve shifts left
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goods used for a longer amt of time
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consumer durables
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during a recession they are the first to decline
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consumer durables
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# of units of a good that all sellers in the market would choose to sell over a time period, given the constraints the face
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quantity supplied
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changes along the supply curve
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changes in quantity supplied
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as the price of a good increases, the quantity supplied increases; positively related
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law of supply
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Cause shift of supply curve
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1) Input prices
2) Technology 3) Prices and Profitability of alternate goods/markets 4) expectations 5) # of firms 6) weather and natural events |
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other goods and services used in the development of a good or service
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input prices
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fall in the price of input(s)
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shifts supply curve right
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rise in the price of input(s)
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shifts supply curve left
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other goods that a firm could produce, suing some of the same inputs
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alternate goods
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rise in price of alternative goods
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suply curve shifts left
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fall in the price of alternative goods
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supply curve shifts right
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increase in the number of firms (sellers
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supply curve shifts right
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expectation of future price rise
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supply curve shifts left
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expectation of future price drop
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supply cruve shifts right
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market quantity bought and solder per period that, once achieved, remains constant, until either the demand curve or supply shifts
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equilibrium quantity
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Qd > Qs
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excess demand
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Qs > Qd
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excess supply
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price ceiling set below the equilibrium
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creates excess demand
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price ceiling set above equilibrium
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creates excess supply
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