Podcast
Questions and Answers
Which of the following describes complementary goods?
Which of the following describes complementary goods?
- Goods that have no relationship to each other
- Goods that are used together (correct)
- Goods that can be used as alternatives for each other
- Goods that exist in limited supply
As income increases, the demand for inferior goods also increases.
As income increases, the demand for inferior goods also increases.
False (B)
What happens to the demand for socks if there is an increase in the quantity of shoes sold?
What happens to the demand for socks if there is an increase in the quantity of shoes sold?
The demand for socks increases.
An outward shift in the demand curve indicates an increase in ______ for that good.
An outward shift in the demand curve indicates an increase in ______ for that good.
Match the following terms with their definitions:
Match the following terms with their definitions:
What happens to the quantity supplied when prices increase, according to the law of supply?
What happens to the quantity supplied when prices increase, according to the law of supply?
According to the law of diminishing marginal returns, increased production using variable costs will always lead to increased marginal returns.
According to the law of diminishing marginal returns, increased production using variable costs will always lead to increased marginal returns.
What is the definition of supply in economics?
What is the definition of supply in economics?
When a firm uses more variable costs while at least one factor of production is fixed, the law of _______ returns applies.
When a firm uses more variable costs while at least one factor of production is fixed, the law of _______ returns applies.
Match the following non-price determinants to their descriptions:
Match the following non-price determinants to their descriptions:
Flashcards
Complementary Goods
Complementary Goods
Goods that are used together; buying one implies buying the other.
Substitutes
Substitutes
Goods that can be used in place of each other.
Normal Goods
Normal Goods
Goods whose demand increases as income increases.
Inferior Goods
Inferior Goods
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Shift in Demand Curve
Shift in Demand Curve
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Supply
Supply
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Law of Supply
Law of Supply
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Diminishing Marginal Returns
Diminishing Marginal Returns
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Marginal Cost
Marginal Cost
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Non-Price Determinants of Supply
Non-Price Determinants of Supply
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Study Notes
Demand
- Non-price determinants affect quantity demanded, not the price
- Related Products:
- Complements: Goods used together (buying one implies buying the other)
- Substitutes: Goods used in place of each other
- Income:
- Normal goods: Demand increases with income
- Inferior goods: Demand decreases with income
- Preferences: Often follow trends, fashion, and taste
- Expectations: Future price expectations influence current demand
- Number of customers: More customers lead to increased demand
Shifts vs. Movements Along the Demand Curve
- A shift in the demand curve happens when a non-price determinant changes
- A movement along the demand curve happens when the price changes
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