The long-run supply curve under pure competition is derived by observing what happens to market price and quantity when market:

Effect of an increase in the price of a product? leftward movement along demand curve

If price of product is above equilbrium: Quantity supplied exceeds quantity demanded

Inferior product: Product which consumers buy less as incromes increase

Oppurtuniy cost of 2 plates of rice, is 1 fish; Two videos for one movie

Substitue products: Price of one increase, quantity purchased of other increases

Which is not a capital good: home's lawnmower, furnace in a steel mill, golf course, construction crane

Oppurtunity cost refers to x-axis: For a loss of 1 tonne of butter, you produce 4 guns; next best alternative

If technology doubled output of guns, at 4 tonnes of butter , 28 guns would be produced

Surplus is above eqilibrium, For surplus to be 600, price must be $80

I supply exceeds demand, there is a decrease in price

Oppurtunity cost: Value of next-best alternative that is given up as a result of buing a particular product

Complemetary products are closely associated to one another: cameras and camera cases

Minimum wage is an example of a price floor

Quota: Supply curve goes vertically up on the quantity,, ex. A quota @ 250 will cause a price of $35

Which of the following statements is true? Inferior goods in one society can be normal goods in a another society

Substitute products: So similar, price is the dciding factor between them: ex. oranges and tangerines

What circumstances will a black market exist? When price ceiling is imposed below equilibrium price, and when price floor is imposed above equilibrium price

Scarcity forces choice which involes oppurtunity costs

Demand shift to left: Fall in the price of a substitiute, Rise in the price of a complement, An increase in income if the product is an inferior product

Supply increase: Improvement on technology