Market Economics - Vocabulary Flashcards (Lettuce, Pink Salmon, Gasoline, Land, Tickets)

Flashcards cover key concepts from the lecture slides: supply and demand shifts (left/right), causes of shifts (technology, entry of producers, income and substitutes), market-specific examples (lettuce, pink salmon, gasoline, land), and ticket markets with preset prices (shortages and surpluses).

Supply shifts left

A decrease in supply at every price; in the lettuce example, caused by weather destroying part of the crop, leading to a higher equilibrium price if demand stays unchanged.

It means that less of a product is available at every price.

📦 Example:

Imagine a factory makes toys.

• Before: They made 100 toys a day.

• After: Something happens (like higher costs or fewer workers), and now they can only make 70 toys a day.

That’s a leftward shift in supply.

Equilibrium price

The price at which quantity supplied equals quantity demanded in a market.

The equilibrium price is the price at which the quantity of a product that buyers want to buy is equal to the quantity that sellers want to sell.

🤝 Simple Example:

Imagine a market for apples:

• At $1 per apple, people want to buy 100 apples, and sellers want to sell 100 apples.

• That means the market is balanced — no one is left wanting more or stuck with extra apples.

✅ This price — $1 — is the equilibrium price.

Quantity demanded

The amount buyers are willing and able to purchase at a given price.

Quantity demanded is the amount of a product that people are willing and able to buy at a specific price.

🧃 Example:

Imagine orange juice costs $2 per bottle.

• At that price, people want to buy 50 bottles.

• So the quantity demanded is 50 bottles at $2.

If the price changes, the quantity demanded usually changes too.

Supply shifts right

An increase in supply at every price;

It means that more of a product is available at every price 🧸 Example:

Imagine a factory that makes toys:

• Before: They made 100 toys a day.

• After: They improve their machines and now make 150 toys a day.

✅ That’s a rightward shift in supply — more supply than before.

💡 What happens next?

• More toys in the market.

• Prices usually go down (because there’s more to sell).

• People might buy more because it’s cheaper.

New technology (as a supply factor)

Technological improvements that make production cheaper or more efficient, increasing supply.

Entry of new fishers

More suppliers entering a market, increasing overall supply.

Demand shifts left

A decrease in demand at every price;

It means people want to buy less of a product at every price.

🍎 Example:

Imagine people used to buy 100 apples a day at $1 each.

• Now, maybe apples are less popular or people don’t have enough money.

• So they only want to buy 70 apples a day at $1.

Supply shifts left for lettuce:

Weather destroys part of the crop.

Supply shifts left for letttuce

what does demand do?

Demand doesn’t change: Consumers still want as much lettuce as before.

Supply decreases (gasoline)

A reduction in supply at every price; shifts left due to factors like refinery breakdowns, geopolitical events, and rising oil prices.

Supply shifts left for lettuce

so what happens to equillibrum?

equilibrium price rises which will reduce the quantity demanded.

Supply shifts right for pink salmon:

•New technology.

•New fishers enter the industry.

Demand shifts left for pink salmon:

•Increases in consumers’ income.

•Reductions in the price of substitutes.

Supply of gasoline decreases:

•Refinery breakdowns.

•Mideast politics and warfare.

•Rising price of oil.

Demand for gasoline increases:

•Consumers’ incomes increased.

•Low mileage S U Vs popular.

Land in San Francisco

Vertical supply curve.

Quantity supplied fixed and unresponsive to price changes.

Demand increase causes price to rise but quantity stays the same.

Demand decrease causes price to fall but quantity stays the same.

Explains high real estate prices in cities.

Preset prices can cause

market imbalances.

Quantity supplied fixed

A condition where quantity supplied does not change with price; illustrates inelastic supply, as in land in San Francisco.

Shortage

A situation where quantity demanded exceeds quantity supplied at the preset price.

Surplus

A situation where quantity supplied exceeds quantity demanded at the preset price.

The Market for Tickets

An example showing how preset prices can create shortages or surpluses in ticket markets.