Podcast
Questions and Answers
What is the direction of the supply curve?
What is the direction of the supply curve?
- Vertical
- Downward to the left
- Horizontal
- Upward to the right (correct)
Which of the following is a non-price determinant of supply?
Which of the following is a non-price determinant of supply?
- Taxes
- Demand of the good
- Price of the good
- Producer's expectation (correct)
What happens to the demand curve when there is an increase in income?
What happens to the demand curve when there is an increase in income?
- It shifts to the left
- It remains the same
- It becomes vertical
- It shifts to the right (correct)
What is the relationship between the price of complementary goods and their demand?
What is the relationship between the price of complementary goods and their demand?
What is the Law of Supply?
What is the Law of Supply?
Which of the following is an example of complementary goods?
Which of the following is an example of complementary goods?
What is the primary consideration for a seller when determining profitability?
What is the primary consideration for a seller when determining profitability?
What is the effect of an increase in taxes on the supply of a good?
What is the effect of an increase in taxes on the supply of a good?
What happens to the supply of goods when there is a tax increase?
What happens to the supply of goods when there is a tax increase?
What is the effect of good weather on the supply of goods?
What is the effect of good weather on the supply of goods?
What is the primary purpose of a subsidy?
What is the primary purpose of a subsidy?
What happens to the supply of goods when there is an expectation of a price increase in the future?
What happens to the supply of goods when there is an expectation of a price increase in the future?
What is the effect of an increase in the number of sellers or producers on the supply of goods?
What is the effect of an increase in the number of sellers or producers on the supply of goods?
What is the role of technology in the supply of goods?
What is the role of technology in the supply of goods?
What is the effect of a charitable institution on the supply of services?
What is the effect of a charitable institution on the supply of services?
What determines the supply of goods and services?
What determines the supply of goods and services?
What is the most important determinant of demand?
What is the most important determinant of demand?
What happens to the demand curve when there is a decrease in quantity?
What happens to the demand curve when there is a decrease in quantity?
What is an example of a non-price determinant of demand?
What is an example of a non-price determinant of demand?
What type of goods are considered alternatives to each other?
What type of goods are considered alternatives to each other?
What happens to the quantity demanded when there is an increase in consumer income?
What happens to the quantity demanded when there is an increase in consumer income?
What is the relationship between the price of a good and the quantity demanded?
What is the relationship between the price of a good and the quantity demanded?
What is an example of a determinant of demand that is related to the consumer's expectations?
What is an example of a determinant of demand that is related to the consumer's expectations?
What type of goods are considered to be used together?
What type of goods are considered to be used together?
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Study Notes
Complementary Goods
- A complementary good is a product that works or partners with another good.
- If one of the two products undergoes a price increase, both products' demands will decrease.
- Examples of complementary goods include key and lock, or printer and ink.
Income and Demand
- An increase in income will shift the demand curve to the right.
- Determinants of demand include price, income, taste and preferences, population, price/consumer expectation, and price of related goods.
Law of Supply
- There is a direct relationship between price and quantity supplied.
- The supply curve slopes upward to the right.
- As price increases, supply will also increase.
Determinants of Supply
- Price is considered first to determine profitability.
- Non-price determinants include:
- Taxes: An increase in taxes will decrease supply.
- Subsidy: A government grant to assist an industry or business.
- Weather: Good weather can increase supply, while bad weather can lead to shortages.
- Technology: Upgrading technology can increase supply.
- Producer's expectation: Expecting higher prices in the future may lead to hoarding products.
- Price of related goods: Similar to the demand.
- Number of sellers or producers: An increase in sellers or producers can lead to a profit.
Taxes
- Taxes are a government revenue that comes from households and firms.
- Types of taxes include:
- Tax stamp (Buwis): Found in cigarettes, alcohol, etc.
- Donor's tax: A tax on a donation or gift.
Subsidy
- A subsidy is a sum of money granted to assist an industry or business.
- Subsidy can help keep prices low or competitive.
Technology
- Technology can help produce more goods and services.
- It is used for marketing, advertisements, feedback, and producing more services.
Changes in Demand
- A shift to the right on the demand curve indicates an increase in quantity.
- A shift to the left on the demand curve indicates a decrease in quantity.
- Y-axis represents price, while X-axis represents quantity.
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