Create
Learn
Share

AP Microeconomics Chapter 3 Terms

rename
actress9098's version from 2016-01-13 05:44

Section 1

Question Answer
Law of DemandAs price goes up, quantity demanded goes down...an inverse relationship
Income EffectLower prices increase purchasing power of income so demand goes up
Substitution EffectHigher prices drive buyers to substitute for cheaper alternatives
Normal GoodsProducts whose demand varies directly with money income
Inferior GoodsGoods whose demand varies inversely with $ income
Substitute GoodsGoods that can be used in the place of another good
Complementary GoodGoods that are used together with another good
memorize

Section 2

Question Answer
Change in DemandShift of the demand curve to the right or left
Change in Quantity DemandedMovement from one point to the other on the demand curve
Law of SupplyAs price goes up quantity supplied goes up..a direct relationship
Change in SupplyShift of the supply curve
Change in Quantity SuppliedMovement from one point to the other on the supply curve
Productive EfficiencyProduction of a good in the least costly way
Allocative EfficiencyMix of goods and services most valued by society
Price CeilingMaximum price fixed by government
Price FloorMinimum price fixed by government
memorize

Section 3

Question Answer
Tastes and preferences of consumers
Other related goods (substitutes/complements)
Expectations
Income
Size of Market (number of buyers)
Special Circumstances
Determinants of DemandThings that shift the demand curve
memorize

Section 4

Question Answer
Determinants of SupplyThings that shift the supply curve
Subsidies and Taxes
Technology
Othere related goods and services
Resources
Expectations
Size of market (number of buyers)
Special Circumstances
memorize