unit 2 terms

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ex: Agriculture

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ex: People buy less product when they are expensive because they are limited by their income

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ex: How much utility a product brings someone as well as how much they are willing to spend on an item changes their quantity demanded of a product

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ex: Changes in trends or statistics about a product may shift the demand curve

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ex: Coke and Pepsi

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ex: A phone and a phone case

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ex: Starbucks coffee

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ex: Generic coffee from supermarket

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ex: the more expensive something is, the more the producer makes because it is more profitable, except in luxury item examples.

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ex: Based on how much material and labor is put into a product, a company formulates a certain price they are able to sell a product to maximize profit

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ex: Changes in technology provide a change in supply.

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ex: Water, fertilizer, soil, and seeds are inputs for crops

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ex: equilibrium is the most ideal spot to sell, or buy a product, but often isn’t achieved due to restrictions.

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ex: A surplus of a product may be resolved by a sale.

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ex: A shortage must be fixed by increasing the price of an item to lower demand, or an change in technology to increase supply.

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ex: To help keep housing prices for impoverished individuals low, a price ceiling is commonly placed below equilibrium for low-income housing options.

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ex: A price ceiling prevents sellers from charging unattainable prices for necessary goods or services

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ex: A price floor ensures employers pay their employees at least minimum wage.

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ex: Because of regulations and restrictions, the Black market is used for individuals to make a profit on goods.

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ex: Supply quotas restrict how much of a product companies can produce, creating a purposeful shortage so the prices are forced to increase.

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ex: Deadweight loss is an inefficiency in economics that creates a shortage of a product.

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ex: When consumers have access to many similar products achieving the same goal, they pick the least expensive one because it satisfies their want or need, sacrificing the least amount of resources

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ex: When consumers make less money, they consume more inferior goods, but as they make more money they consume less inferior goods and more normal goods

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ex: more horizontal line more vertical line on graph

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ex: more vertical line on graph

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ex: midpoint of line on graph

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ex: perfectly horizontal line on graph

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ex: perfectly vertical line on graph

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ex:

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ex:

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ex: sales tax

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ex: In some states, income tax is proportional

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ex: investment income taxes

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ex: alcohol and Tabaco taxes

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ex: Typically the poor are more burdened by taxes and therefore have a greater tax incidence.

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ex: property taxes

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ex: How much satisfaction a product or service provides a consumer may allow them to purchase that good or service more

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ex: How to compare the value different products with different monetary values

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Other AP Microeconomics unit study guides

AP Microeconomics Ultimate Guide

Unit 1: Basic Economic Concepts

Unit 2: Supply and Demand

Unit 3: Production, Cost, and the Perfect Competition Model

Unit 4: Imperfect Competition

Unit 5: Factor Markets

Unit 6: Market Failure and the Role of Government

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