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25 Cards in this Set

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  • Back
Resource Price (a cost to the business) ↓; Opportunity Costs ↓; Profits ↑; Qx Supplied ↑
Example: price of fertilizer drops; opportunity costs of producing the good drops; profit higher; corn production increases
Resource Price (a cost to the business) ↑; Opportunity Costs ↑; Profits ↓; Qx Supplied ↓
Example: a new wage contract boosts wages; opportunity costs of producing the good increases; less profit; less incentive
Technology
production methods used to combine, resources to produce goods and services.
Technological advance
increased productivity of resources, or, get more output per unit of input
Advantages in Technological advances
efficiencies are gained'; Opportunity Costs are reduced; more profit; more will be produced.
Natural disasters can reduce Supply
Hurricanes, drought, early freezes,
Weather conditions can facilitate Supply
Bumper crops, tourism increases
Political events, can disrupt Supply
Oil from the Mid-East, Cuban, cigars
Political events can encourage Supply
Deregulation of Trucking, Airlines
Imposition raises Opportunity Cost of production; less Supply
10% luxury tax on autos
Reduction lowers Opportunity Cost of production; more Supply
Reduced Capital Gains
Market Supply is the sum of the Individual Supply Curves:
a. One company selling Stereos in Trumbull County Qx = Qmarket
b. Two companies selling Stereos in Trumbull County Qx + Qy = Qmarket
c. Three 'companies selling Stereos 'in Trumbull County Qx + Qy + Qz = Qmarket
Substitutes
Py↑ Qx↑; Py↓Qx↓ Margarine and Butter, IBM & Compaq computers
Complements
Py↓ Qx↑; Py↑ Qx↓ Greens fees & golf balls, computers & floppy discs
Normal Good
Income↑ Qx↑ Income ↓ Qx↓ Travel, Appliances
Inferior Good
Income↑ Qx↓ Income ↓ Qx↑ Macaroni & cheese
Expect a price increase
Qx↑ in present time period "Buy now, beat the price increase"
Expect a price decrease
Qx↓ in present time period After-Christmas Sales
Expect Income to rise
Qx↑ in present time period College Seniors
Expect Income to fall
Qx↓ in present time period Expect being laid off
Expect product to be available soon:
CD players, new cars
Qx↓ in present time period
Expect product won't be available in future
Discontinued brands, oil in 1974
Qx↑ in present time period
Product is "fashionable"
Qx↑ $100 running shoes, NFL jackets
Product is "unfashionable”
Qx↓ Leisure Suits, 8-track tapes
Market Demand is the sum of the Individual Demand Curves:
a. Sell Stereos only in Trumbull County Qx Trumbull
b. Sell Stereos in Trumbull & Mahoning Counties Qx Trumbull + Qx Mahoning
c. Sell Stereos in Trumbull, Mahoning & Stark Qx Trumbull + Qx Mahoning + Qx Stark