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Test 1 (got the best grade in class)

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Department
Economics
Course
ECON 2010
Professor
All Professors
Semester
Fall

Description
09062011Econ2010Test1Chapter3VocabPerfectlycompetitivemarketamarketthatmeetstheconditionsof1manybuyersandsellers2allfirmssellingidenticalproductsand3nobarrierstonewfirmsenteringthemarketTheDemandSideoftheMarketDemandScheduleAtableshowingtherelationshipbetweenthepriceofaproductandthequantityoftheproductdemandedQuantityDemandedtheamountofagoodorservicethataconsumeriswillingandabletopurchaseatagivenpriceDemandCurveacurvethatshowstherelationshipbetweenthepriceofaproductandthequantityoftheproductdemandedonagraphMarketDemandthedemandbyalltheconsumersofagivengoodorserviceTheLawofDemandLawofdemandtherulethatholdingeverythingelseconstantwhenthepriceofaproductfallsthequantitydemandedoftheproductwillincreaseandwhenthepriceofproductrisesthequantitydemandedoftheproductwilldecreaseWhatExplainstheLawofDemandBoththesubstitutioneffectandincomeeffecthappensimultaneouslySubstitutioneffectthechangeinthequantitydemandedofagoodthatresultsfromachangeinpricemakingthegoodmoreorlessexpensiverelativetoothergoodsthataresubstitutesExamplewhenthepriceofenergydrinksfallsconsumerswillsubstitutebuyingenergydrinksinsteadofbuyingothergoodssuchassportsdrinksorcoffeeIncomeeffectthechangeinthequantitydemandedofagoodthatresultsfromtheeffectofachangeinthegoodspriceonconsumerspurchasingpowerPurchasingpoweristhequantityofgoodsaconsumercanbuywithafixedamountofincomeHoldingEverythingElseConstantTheCeterisParibusConditionCeterisparibusallelseequalconditiontherequirementthatwhenanalyzingtherelationshipbetweentwovariablesuchaspriceandquantitydemandedothervariablesmustbeheldconstantAshiftofdemandcurveisanincreaseoradecreaseindemandAmovementalongademandcurveisanincreaseordecreaseinthequantitydemandedVariablesthatShiftMarketDemandIncomeifincomeincreasesthedemandcurvemovestotherightdecreasesmovestotheleftNormalgoodagoodforwhichthedemandincreasesasincomerisesanddecreasesasincomefallsexShrimpandprimeribInferiorgoodagoodforwhichthedemandincreasesasincomefallsanddecreasesasincomerisesexHotdogsandtunaPricesofrelatedgoodsSubstitutesGoodsandservicesthatcanbeusedforthesamepurposeExCoffeeandEnergyDrinksIfCoffeepricegoesdownthedemandcurveforenergydrinksshiftstotheleftIfthepriceofcoffeegoesupthedemandcurveforenergydrinksincreasesandshiftstotherightComplementsgoodsandservicesthatareusedtogetherExHotdogbunsandhotdogsIfthepriceforhotdogbunsgodownthedemandcurveforhotdogswithshifttotherightIfthepriceforhotdogbunsgoupthedemandcurveforhotdogswillshifttotheleftTastesIfconsumerstasteforaproductincreasesthedemandcurvewillshifttotherightandwhenconsumerstasteforaproductdecreasesthedemandcurvewillshifttotheleftPopulationanddemographicsDemographicsthecharacteristicsofapopulationwithrespecttoageraceandgenderExMoreHispanicsmeansanincreaseindemandforSpanishgoodscausingdemandcurvetoshifttotherightExpectedfutureprices
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