Introduction to Microeconomics

When there is no change in demand, but supply shifts to the right

Price decreases, quantity increases

When there is no change in demand, but supply shifts to the left

Price increases, quantity decreases

When there is no change in supply, but demand shifts to the right

Price increases, quantity increases

When there is no change in supply, but demand shifts to the left

Price decreases, quantity decreases

When both supply & demand shift to the right

Price is unknown, quantity increases

When demand shifts to the right, but supply shifts to the left

Price increases, quantity is unknown

When demand shifts to the left, but supply shifts to the right

Price decreases, quantity is unknown

When both supply & demand shift to the left 

Price is unknown, quantity decreases

Elasticity

measures the responsiveness of one variable to another in % change

Consumer surplus

The difference between what you’re willing to pay for something and the actual price you pay

Producer surplus

The difference between the lowest price you’d be willing to accept for a product and the actual price you receive

Opportunity cost

The highest valued alternative that must be given up

Marginal benefit

Added benefit that arises from an increase in some activity

Marginal cost

Added cost that arises from an increase in some activity