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REAL PURCHASING POWER: The ability to acquire wants-and-needs satisfying goods and services with income or money. The real purchasing power of income or money depends on the prices of the goods and services. If the price level, for example, doubles, then a given amount of money can purchase half as many goods and services.
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Lesson 8: Market Shocks | Unit 3: Single Shifts
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Page: 11 of 20
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The six steps for a decrease in supply:- A determinant changes. Sellers expect higher prices.
- A curve to shifts. The supply curve for hot fudge sundaes shifts leftward.
- A shortage or a surplus occurs. The decrease in supply causes a shortage of hot fudge sundaes.
- The price changes. The price of hot fudge sundaes goes up.
- The quantities demanded and supplied change. The quantity supplied for hot fudge sundaes increases while their quantity demand is reduced.
- The market imbalance is eliminated and equilibrium is restored. The shortage of hot fudge sundaes is eliminated. The price is higher and the quantity exchanged is less.
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POSITIVE ECONOMICS The branch of economics that seeks to explain the way the economy actually operates. It is the application of the scientific method and the process of testing hypothesis to economic phenomena. A positive economic statement is one that can be refuted by looking at the real world--that is, by testing a hypothesis.
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RED AGGRESSERINE
[What's This?]
Today, you are likely to spend a great deal of time browsing through a long list of dot com websites looking to buy either a birthday gift for your grandfather or a pleather CD case. Be on the lookout for empty parking spaces that appear to be near the entrance to a store.
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This isn't me! What am I?
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Three-forths of the gold mined each year is used to manufacture jewelry.
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"The past is a foreign country; they do things differently there." -- Leslie Poles Hartley, Writer
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PPF
Production Possibilities Frontier
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