ECON 040 Lecture Notes - Lecture 2: Economic Equilibrium, Demand Curve, Complementary Good

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bronzegrasshopper664

22 Oct 2020

School

College of The Sequoias

Department

Economics (ECON)

Course

ECON 040

Professor

Kasun

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Document Summary

A change in the amount offered for sale caused by a change in the price, a movement along the curve(graph on the left) A shift of the entire curve to the left or right(graph on the right) Technology- the production process of changing economic resources into goods and services; when technology improves, supply increases. Expectations of future prices- expected future price changes and current supply move opposite; good must be durable/storable. Number of sellers- usually the number of sellers in a market changes as profits. Market model change; firms will enter when profit is high and exit when it is low. Equilibrium price- price at which the market clears(supply=demand) Surplus- at prices above the equilibrium price. Surpluses put downward pressure on prices until the surplus is eliminated. Shortage- at prices below the equilibrium price: demand>supply. Shortages put upward pressure on prices until the shortage is eliminated. Solving for pe(equilibrium price) and qe(equilibrium quantity)

Related Questions

Which of the following statements is true about the supply?

a. Supply refers to the amount of inventory that sellers have in their warehouses.

b. There is an inverse relationship between price and quantity supplied.

c. As price increases, producers are willing and able to put more of the good on the market for sale.

d. As price decreases, producers are willing and able to put more of the good on the market for sale.

crimsonalligator541

Who bears the primary costs of a rent control program?

landlords

renters that get rent-controlled apartments

taxpayers

the wealthy

Assume the demand for sushi is Qd = 180 - 3P, where Qd is quantity demanded and P = price in dollars. The supply of sushi is Qs = 80 + 5P, where Qs is quantity supplied (and P is, again, price in dollars). A price of $20 would result in:

	A.	Excess supply of 60
	B.	Excess supply of 120
	C.	Excess supply of 140
	D.	Excess demand of 140

US agricultural price supports are politically popular because

They have no adverse impacts

The US would have food shortages without them

The benefits accrue to a large number of voters and the costs are paid by a small number of voters

The costs are spread out among millions of people

	A.	$15.50
	B.	$12.50
	C.	$10
	D.	$15

Price floors and ceiling prices:

cause the supply and demand curves to shift until equilibrium is established.

both cause surpluses.

interfere with the rationing function of prices.

A change in the price of a good leads to a change in ________, which leads to a ___________

quantity supplied; shift of the supply curve

supply; shift of the supply curve

quantity supplied; movement along the supply curve

When the supply of a product increases, this implies that

the price of the product first declined

more will be purchased at the same price

producers will be willing to accept a lower price for each unit sold

demand for the good must have increased

producers will offer less for sale at each possible price

If there is a excess demand for product X:

fewer resources will be allocated to the production of this good.

the price of the product will rise.

the supply curve will shift to the left and the demand curve to the right, eliminating the shortage.

the price of the product will decline.

Which of the following will occur when there is a simultaneous decrease in demand and a decrease in supply?

B and D both necessarily occur

An increase in equilibrium quantity

A and C both necessarily occur

An increase in price

A and D both necessarily occur

A decrease in price

A decrease in equilibrium quantity

Velcro is becoming more and more popular for a variety of uses, including as fasteners for shoes. What should happen to the equilibrium price and quantity for shoelaces as a result?

Both price and quantity should decrease.

Price should increase and quantity decrease.

Both price and quantity should increase.

Price should decrease and quantity increase.

Nothing.

If the government imposes a ceiling price on apartment rents, we would expect to observe all of the following except one. Which is the exception?

	A.	conversion of some apartment complexes to condos
	B.	a shortage
	C.	an increase in the number of new apartment complexes being built
	D.	lower maintenance of existing apartments
	E.	long waiting lists for apartment seekers

supply; movement along the supply curve

both cause shortages.

chocolatebadger640

A drought decreases the supply of agricultural products, which means that at any given price a lower quantity will be supplied; conversely, especially good weather would shift the

A. demand curve to the right

B. supply curve to the left

C. supply curve to the right

D. demand curve to the left

crimsonhornet860

ECON 040 Lecture Notes - Lecture 2: Economic Equilibrium, Demand Curve, Complementary Good

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