Academic Decathlon Economics

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What mechanism produces a high amount of coordination within our modern economy?

The interaction between supply and demand

Within markets what determines the price at which each product or service sells and the quantity?

The actions of buyers and sellers

Who responds to market prices?

Individual buyers and sellers

What is the central topic of microeconomics?

The interaction of supply and demand

What is a market?

 A market is composed of all the buyers and sellers of  a particular good or service.

What are the examples of markets that are highly organized?

New York stock exchange, Chicago Mercantile exchange.

What is different about highly organized markets and non-organized markets?

In Highly organized markets buyers and sellers come together at a single location, and an auctioneer helps to set a price at which exchanges take place.

What is an example of a highly competitive market?

Gasoline

What is a perfectly competitive market?

 If the good or service is highly standardized, the number of buyers and sellers is large, and the participants are well informed about the price. 

In a perfectly competitive market buyers and sellers can buy or sell as much as they want without influencing what?

The market price.

What is quantity demanded of any good?

It refers to the total amount of a good or service that consumers are willing and able to purchase at a given price over a specific period of time.

what is the law of demand?

If the price of the good is higher, buyers will demand less of the good; if the price is lower, then they will demand more. This principle shows the inverse relationship between price and quantity demanded.

What is the result of a cost benefit analysis that rational decision makers use when deciding how to allocate their resources?

Demand Curve

What increases when the price of a good increases?

Opportunity Cost

What is a demand schedule?

A table that shows the quantity of a good that consumers are willing to buy at different prices. It illustrates the relationship between price and quantity demanded.

What is a demand curve?

A graphical representation of the relationship between the price of a good and the quantity demanded by consumers at various price levels.

How to find the market demand schedule?

Add up the quantity that every consumer will purchase at each possible price?

How do we add two demand curves so we obtain the market demand?

We add horizontally. The prices aren’t added to the demand curve only the amount of the object. This means that at each price point, we sum the amount of products demanded by all consumers to get the total demand in the market.

What are some important factors affecting the quatity demanded other than price?

Income, The price of related goods, Tastes, Expectations, and the number of buyers.

Is Demand positively or negatively related to income?

Positively related, when income rises the quantity demanded rises, but when income falls the quantity demanded falls

What are goods called when Demand is positively related to income?

Normal goods

What are goods for which quantity demanded falls as income rises?

Inferior goods, LOW QUALITY GMO FOODS.

When a decline in the price of one good causes a reduction in the quantity demanded of another, what is the called?

Substitutes

When a decline in the price of one good causes a increase in the quantity demanded of another, what is the called?

Complements

What is supply?

it is the amount that sellers of that good are willing to and able to produce.

What is the most important factor in influencing quantity supplied

The price that the sellers recieve.

What is the positive relation between price and quantity supplied? The higher the price is, the greater the quantity that suppliers will want to produce.

Law of supply

How is a supply curve obtained?

by adding the quantities supplied at each price by all the suppliers

What factors may cause a shift in the supply curve?

Input prices, Technology, expectations, and number of sellers.

What are inputs?

Inputs are any of the things that suppliers have to purchase to supply a produce. Like the price that gasoline stations must pay their suppliers for gasoline is a major cost in doing buisness.

If the price of gasoline falls where does the supply curve shift?

To the right because the quantity of gasoline supplied will increase.

How does technology cause changes in the supply curve?

It can increase the effiency of things. Like in the gas station the pump for gas can go from full service to self service reducing the labor cost

How does expectations cause changes in the supply curve?