ECON 1000 Study Guide - Midterm Guide: Price Ceiling, Price Floor, Demand Curve
8 May 2017
School
Department
Course
Professor
Document Summary
Inflation: an increase in the overall level of prices in the economy: business cycle: fluctuations in economic activity such as unemployment and production. Chapter 3: interdependence and the gains from trade. Imports: goods and services produced abroad and sold domestically: exports: goods and services produced domestically and sold abroad. Chapter 4: the market forces of supply and demand. Key terms: substitution effect: when prices for substitute goods are cheaper than the normal good, consumers choose the cheaper choice. Income effect: when income increases so does the purchase of normal goods. If demand for a good rises, when income falls it is a inferior good: prices of related goods. Substitutes when price falls for one good decreases demand for another. Expectations of price will force firms to adjust their supply: number of sellers. The more sellers there are in a market the more supply of those goods in the same market.
