Micro Economics test

1. Land

2. Labour

3. Capital

4. Entrepeneur

Short in supply

Buyers

Sellers

Quantity of a product or services that consumers are willing and able to purchase at a given price at a given time period

The willingness and ability of producers to create goods and services to take them to the market

Quantity supplied by all producers (all firms together)

raise the price (visa versa)

to see a contraction (decline) of supply and producers have less incentive produce at lower prices

1. Cost of production

2. Price of related goods

3. Productivity

4. Technology

suppliers are less willing and able to supply at the SAME price

1. Factors of production

2. In the price and profitability of other goods and services

3. Technology

4. Business optimism and expectations

5. Global factors

As the price of a product rises, the quantity supplied of the product will usually increase (ceteris paribus)

A payment made to producers to help reduce their cost of production (by the government)

Producers will tend to increase supply at every given price

Price increases, demand decreased (visa versa)

Changes in price affects consumers' purchasing power. Those with higher income can afford to purchase more than those with lower income

Changes in price motivates consumers to purchase relatively cheaper products instead of the higher priced goods

If income increases, quantity demanded increases (visa versa)

If cost increases, supply decreases (visa versa)

Products good for society (solar panels, agriculture, medicine, education, electric cards, public transport)

The difference between the price and what you would have potentially (willing) to have paid

The difference between the price and what you are willing and able to produce for

Consumer surplus + producer surplus

base(1/2) x height

Price elasticity of demand

The responsiveness of the quantity demanded to a change in price

The good is price elastic, meaning that it is highly responsive to change in price

The good has unit elasticity, meaning everything goes up in uniform (the same)

The good is price inelastic, meaning price change does not affect demand

% change in quantity demanded / % change in price

((new quantity - original quantity) / original quantity) / ((new price - original price) / original price)

1. Income

2. Consumption

3. Wealth

Unavoidable taxes (income, corporation, inheritance tax)

Levied on goods and services (to discourage the merit goods)

Avoidable taxes (sales, BTW, Duty tax)