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SCARCE: The general condition indicating that a good or resource is limited relative to the what people want. In terms of ALL resources and goods throughout society, the related term scarcity is used. Being scarce is what makes it possible to exchange goods and resources through markets, and most importantly, charge a price. If a good is not scarce, which means that the economy has more than enough to satisfy all available uses, then there is no way to sell it. Who would buy such an item, pay a price for it, give up something of value in exchange for it, when it is so abundant? Likewise, if a item is so abundant, using it to satisfy one use does not impose an opportunity cost on other uses.
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Lesson 8: Market Shocks | Unit 4: Double Shifts
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Page: 13 of 20
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Topic:
More Demand and More Supply
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Market equilibrium is disrupted if both the demand (higher income) and supply (technological breakthrough) curves shift.- An increase in demand creates a shortage. Price and quantity tend to increase.
- An increase supply creates a surplus. Price declines and quantity increases.
- The combined effect is an obvious increase in quantity but a questionable change in price.
- At the new equilibrium the price is indeterminant.
- If demand shifts relatively more than supply, price is higher.
- If demand shifts relatively less than supply, price is lower.
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ARC ELASTICITY The average elasticity for discrete changes in two variables. The distinguishing characteristic of arc elasticity is that percentage changes are calculated based on the average of initial and ending values of each variable, rather than initial values. Arc elasticity is generally calculated using the midpoint elasticity formula. The contrast to arc elasticity is point elasticity. For infinitesimally small changes in two variables, arc elasticity is the same as point elasticity.
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PINK FADFLY
[What's This?]
Today, you are likely to spend a great deal of time waiting for visits from door-to-door solicitors wanting to buy either a large green chalkboard shaped like the state of Maine or a replacement battery for your pocket calculator. Be on the lookout for deranged pelicans.
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The average bank teller loses about $250 every year.
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"People of mediocre ability sometimes achieve outstanding success because they don't know when to quit. " -- George Allen, U.S. senator
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RMS
Real Market Share
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