Economics: Demand and Supply Curve Shifts

Vocabulary flashcards detailing the factors and determinants that cause shifts in the demand and supply curves.

Demand Curve Shifts (Direction)

An increase in demand causes a shift to the right, while a decrease in demand causes a shift to the left.

Consumer Taste / Trend / Food Preference

A demand curve determinant where demand increases when a product becomes popular and decreases when a product becomes unpopular.

Prices of Related Goods

A demand curve determinant where demand increases when a substitute becomes more expensive and decreases when a substitute becomes cheaper.

Number of Consumers / Buyers

A demand curve determinant where demand increases when more customers enter the market and decreases when there are fewer customers.

Consumer Expectation

A demand curve determinant where demand increases when people expect higher future prices and decreases when people expect lower future prices.

Consumer Income

A demand curve determinant where demand increases when income rises for normal goods and decreases when income falls for normal goods.

Cost Input / Resource Price

A supply curve determinant where supply increases when costs decrease and decreases when costs increase.

Productivity

A supply curve determinant where supply increases when workers become more efficient and decreases when workers become less efficient.

Weather / Acts of Nature

A supply curve determinant where supply increases when good weather increases production and decreases when bad weather destroys crops.

Government Regulation / Government Quotas

A supply curve determinant where supply increases with fewer rules and higher quotas, and decreases with more costly rules and lower quotas.

Taxes / Subsidies

A supply curve determinant where supply increases when taxes decrease or subsidies increase, and decreases when taxes increase or subsidies decrease.

Number of Suppliers

A supply curve determinant where supply increases when more businesses enter the market and decreases when businesses leave the market.

Producer Expectation on Future Prices

A supply curve determinant where supply increases when producers expect lower future prices and sell more now, and decreases when producers expect higher prices and hold supply.

Technology

A supply curve determinant where supply increases when better technology makes production easier and decreases when technology becomes less effective.