1. Section 2 Review

2. Key Terms Law of Demand Input Inefficient Allocation Quantity Demanded
Equilibrium
Wasted Resources
Equilibrium Price
Change in Demand
Market-Clearing Price
Black Market
Substitutes
Minimum Wage
Equilibrium Quantity
Complements
Quantity Control/Quota
Normal Good
Surplus
Deadweight Loss
Inferior Good
Shortage
Law of Supply
Price Controls
Quantity Supplied
Price Ceiling
Change in Supply
Price Floor

3. Key Graphs

4. Demand Curve

5. Supply Curve

6. Equilibrium

7. Shortage

8. Surplus

9. Price Ceiling

10. Price Floor

11. Key Mistake on Exams
Mistaking Quantity Demanded for Demand >>> A change in price results in a movement along the demand curve. This is a change in quantity demanded. >>> A change in any other factor that affects demand results in a shift in the demand curve. This is a change in demand. Be aware of the same issues with Quantity Supplied and Supply!

12. Demand Shifters TRIBE Price of Substitute Price of Complement Incomes
Tastes and Preferences
Expected Future Prices
Number of Consumers
TRIBES
Tastes and Preferences
Related Goods
Income
Buyers
Expectations

13. Supply Shifters IRENT Price of Inputs
Price of Substitute in Production
Price of Complement in Production
Technology
Expected Future Prices
Number of Producers
IRENT
Input
Related Goods
Expectations about future prices
Number of Producers
Technology

14. AP Exam Tips Supply and Demand Graphs – draw and label EVERYTHING!
Price changes quantity demanded/supplied.
Non-price factors change demand/supply.
Shift left is a decrease. Shift right is an increase.
Equilibrium is where quantity demanded equals quantity supplied. There are no shortages or surpluses. There is no pressure on price to change.
Draw the graph when answering supply and demand multiple choice questions on the exam!
Always label the initial equilibrium price and quantity. Then draw the shift, then the new equilibrium price and quantity. This will help you analyze the effects of the change.