Sides Game
Increase in the Price of Corn Effect on demand for corn? NONE
Decrease in P and Q What single shift has occurred? Decrease in Demand
One reason the demand curve slopes downward is that as one product gets more expensive, similar products become relatively cheaper. This is called the substitute effect
Point to the Equilibrium Price
A price increase of a product will cause a decrease of _________ for that product Quantity Demanded
price floors cause? Surpluses
Example of substitutes of consumption Butter/margarine
Example of complements of consumption Pb and j
Example of complements of production Beef and leather Donuts and donut holes
Which is perfectly inelastic?
Example of substitutes of production Cakes or cupcakes
Law of Demand states Consumers will buy more at a lower price and less at a higher price
Law of Supply states Producers are willing and able sell less at a lower price and more at a higher price
A good with inelastic demand Gas (any necessity)
A good with elastic demand Lemon scented garbage bags
Government paying producers a portion of production costs is called subsidy
Point to the floor
Minimum wage is a price floor
If both supply and demand increase, what do we know for sure If both supply and demand increase, what do we know for sure? Q will increase
Illegal sales resulting from price controls occur in what type of markets? Black Markets
An increase in the price of rubber will cause what shift in the tire market? Decrease supply
An increase in the price of rubber will cause what changes to price and quantity in the tire market? P increase and Q decrease
Movement along a demand curve represents a change in quantity demanded.
Point to the ceiling
Shifting a demand curve represents a change in demand
Which is perfectly elastic?
The point where the quantity supplied is equal to the quantity demanded. equilibrium