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Economics Unit 2
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Economics
11th
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34 Terms
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1
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Law of Supply
as prices rise, so does supply. there is direct relationship between price and quantity supplied.
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Law of Demand
as price falls, quantity demanded rises other things being equal. This describes an inverse relationship between price and quantity demanded.
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Changes in Quantity Demand (Movement)
a movement can only happen when a price change occurs.
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Changes in Quantity Demand (Shift)
* a change in a non price factor causes a shift.
* a demand shift occurs when there is a change in a non price factor.
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Supply Movement
a movement along the line that is caused by a price shift.
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SUPPLY Shift (GOOD=RIGHT)
* if the company is able to produce goods, the shift will be to the right which is increasing total quantity produced.
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SUPPLY Shift (BAD=LEFT)
* if there is an event that reduces the company ability to produce goods, shift will be to the left, decreasing total quantity produced.
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(D.D) change in income
when your income goes up you spend more stuff and vis versa.
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(D.D) complementary
items that go well together (ketchup and fries)
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(D.D) substitute
goods that can be used to replace another good (coke and pepsi)
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(D.D) change in taste and preference
as consumer tastes change so does demand.
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(D.D) change in expectations
an expected change in the future price will change in demand today.
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(D.D) change in the # of consumers
changes of the # of consumers can happen for a variety of reasons for example death, birth, etc.
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(S.D) # of producers
if there are more producers, then total production will increase at all levels.
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(S.D) resource price
are the inputs for business. if there is a change in the price of a resource it causes a change in the cost to produce goods,
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(S.D) state of tech
tech is used to increase productivity and output. (computers robots, machinery)
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(S.D) prices of related goods
related goods for producers are tings that the company could also make instead.
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(S.D) nature
change in nature (think weather and natural events)
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(S.D) producer expectation
if producers expect prices in the future, it changes their behaviour today.
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Slope Demand
is generally considered to slope downward at higher prices consumers buy less.
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Slope Supply
is generally considered to slope upward as the prices rise meaning suppliers are willing to produce more.
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Surplus
when the price is lesser than the equilibrium price then the quantity supplier is greater than the quantity demanded.
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Shortage
when the price is lesser than the equilibrium price then the quantity demanded is greater than the quantity supplied.
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Equilibrium
refers to a situation in which the price has reached the level where quantity supplied equals quantity demand.
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Unemployment
anyone over the age 16 not in school or who don’t have a job but are actively seeking work.
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Seasonal
is unemployment due to seasonal changes in employment or labour supply (wonderland)
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Frictional
is a brief period of unemployment caused by moving between jobs or into labour market ex. college or university graduates.
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Structural
caused by mis match between the skills or location of job seekers and the requirement or location of available jobs.
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Cylical
caused by a lack of job opening a poor level of aggregate demand. occurs during recessions and company cut back workers.
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Economic Inequality
an unequal distribution of income and opportunity between different groups of society.
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Unemployment Equation
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Progressive income tax
the more money you make the more taxes you pay
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Regressive taxes
is applied to all citizens no matter what you income is, you still have to pay.
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Welfare State
the social safety net is set of government policies to support struggling citizens through taxation and spending.