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Ch 3 AP Econ
AP econ notes
17
Economics
12th Grade
01/27/2011

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Cards

Term
a change in demand shifts what?
Definition
the curve
Term
a change in quantity demand moves where?
Definition
ALONG the curve
Term
name some determinants of demand.
Definition
1. change in consumer tastes 2. # or composition of buyers 3. income 4. price of related good 5. change in expectations, including expectation of future prices, product availability
Term
name determinants of supply.
Definition
1. resource prices 2. technology 3. changes in taxes and subsidies 4. change in price of other goods 5. change in expectations, ESPECIALLY of prices 6. # of supplies
Term
example of change in consumer tastes?
Definition
bottled water; Starbucks
Term
example of number or composition of buyers?
Definition
McDonald's becoming an int'l company
Term
difference between superior/normal goods and inferior goods. what influences which type of good a person will buy?
Definition
superior/normal - brand name. Inferior - generic brand. *INCOME
Term
example of substitute good?
Definition
buying Coke when Pepsi is expensive
Term
market
Definition
all situations that link potential buyers w/ potential sellers
Term
demand
Definition
curve that shows amts of a product that consumers are willing & able to purchase. **statement of a buyer's plans or intentions
Term
Law of demand
Definition
negative/inverse relationship between price & quantity demanded
Term
why is there an inverse relationship between price and quantity demanded?
Definition
1. common sense. people buy more of a product at a low price than a high price. 2. diminishing marginal utility 3. income effect
Term
diminishing marginal utility
Definition
when buying the same product repeatedly provides less satisfaction than the initial purchase
Term
income effect
Definition
lower price enables the buyer to purchase more of the product
Term
complementary goods
Definition
used together & usually demanded together i.e. movies and popcorn, ham and eggs, XBOX and games
Term
supply
Definition
schedule or curve showing the amts of a product that producers are willing and able to make available for sale at each of a series of possible prices during a specific period
Term
law of supply
Definition
as price rises, quantity supplied rises; as price falls, quantity supplied falls
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