1. Chapter 6: Equilibrium Review BINGO

2. Excise Tax A tax that is placed on items the government believes is “harmful” to people” Example: Cigarettes & alcohol

3. Decrease in Demand

4. Regulation Government intervention in the MARKET

5. Subsidy Example: The government helps students pay for their school lunches.

6. Operating Costs Cost of operating a facility

7. Output QUANTITY PRODUCED per (over) TIME

8. Demand The amount a person is willing and able to BUY

9. Supply The amount a firm is willing and able to SELL

10. Supply schedule PriceQuantity $11 $22 $33 $44 $55

11. Taxes One of the “T”s in Spent $.06 on a dollar or 1/3 of your gross income.

12. Complement “You look good” OR +

13. Increase in Quantity Demanded

14. Inverse Relationship Variable move in Opposite direction (explains law of demand)

15. Price Floor

16. Price Ceiling

17. PYNTE Price of related goods Y income Number of demanders Taste Expectations

18. Minimum Wage An example of a price floor. The smallest amount a person can get paid

19. Input Example: wood to make chairs Example: sauce for pizza

20. Supply Curve

21. Profit Total Revenue - Total costs

22. Necessity Something that you always need- no matter how much it costs

23. Supplier Input Costs Spent variable of “S”“S”

24. Normal Good As your income increases, you demand more of this kind of product Example: Lobster, BMW

25. Ceteris Paribus A Latin phrase meaning- “all other things held constant”- except for PRICE

26. Variable Cost A cost that changes

27. Total Cost Fixed Cost + Variable Cost

28. Number of Demanders Pynte variable of “N”

29. Luxury

30. Market Demand Schedule PriceQuantity $15000 $24000 $33000 $42000 $51000

31. Decrease in Supply

32. Spent Supplier Input Costs Price of related goods Expectations Number of suppliers T- 4 T’s (Tech, tampering, taxes, temp.)

33. Increase in Demand

34. Decrease in Quantity Demanded

35. Taste “BIG hair” “Flat hair” Out of style In style

36. Demand Curve

37. Decrease in Quantity Supplied

38. Substitute OR hamburgerHot dog

39. Increase in Quantity Supplied

40. Direct Relationship 2 variables move in the same direction

41. Price of Related Goods OR Another shirt Shirt pants substitutecomplement

42. Market Supply Schedule PriceQuantity $11000 $22000 $33000 $44000 $55000

43. Technology An improvement to a piece of machinery Example: A computer

44. Increase in Supply

45. Rent Control In New York, this is a common practice to eliminate rent prices getting to high for the “average” person to afford

46. Excess Demand Another name for a shortage

47. Equilibrium Price $2

48. Equilibrium Quantity 20

49. Disequilibrium Anything other then equilibrium

50. Excess Supply Another name for a surplus

51. Law of Demand As price increases, demand decreases. As price decreases, demand increases.

52. Number of Suppliers “N” in SPENT variables Amount of firms

53. Expectations SPENT & PYNTE variable “E” What will happen?

54. Law of Supply As price/output increases, supply increases or As price/output decreases, supply decreases

55. Inferior Good As income increases, people demand LESS of a product Example: SPAM

56. Tampering A “T” in the SPENT variables Means government regulations

57. Temperature A “T” in the SPENT variables weather

58. Demand Schedule PriceQuantity $15 $24 $33 $42 $51

59. Elastic Describes demand that is very sensitive to a change in price

60. Increasing Marginal Returns A level of production in which the marginal product of labor increases as the number of workers increases

61. Total Revenue Total amount a company brings in COST + PROFIT

62. Decreasing Marginal Returns A level of production in which the marginal product of labor decrease as the number of workers increases

63. Income PYNTE variable “I” or “Y” The amount a person or household makes

64. Fixed Cost A cost that does not change

65. Marginal Cost The cost of producing 1 more unit of a product

66. Inelastic Describes demand that is NOT sensitive to a change in price