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23 Cards in this Set
- Front
- Back
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Quantity demanded
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The amount of a good or service that a consumer is willing and able to purchase at a given price.
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Demand schedule
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A table showing the relationship between the price of a product and the quantity of the product demanded.
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Demand curve
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A curve that shows the relationship between the price of a product and the quantity of the product demanded.
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market demand
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The demand by all the consumers of a given good or service.
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Law of demand
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Holding everything else constant, when the price of a product falls, the quantity demanded of the product will increase, and when the price of a product rises, the quantity demanded of the product will decrease.
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Substitution effect
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The change in the quantity demanded of a good that results from a change in price making the good more of less expensive relative to other goods that are substitutes.
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Income effect
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The change in the quantity demanded of a good that results from the effect of a change in the good's price on consumer purchasing power.
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Ceteris paribus
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("all else equal")
The requirement that when analyzing the relationship between two variables--such as price and quantity demanded--other variables must be held constant. |
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Substitutes
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Goods and services that can be used for the same purpose.
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Complements
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Goods that are used together.
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Normal Good
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A good for which the demand increases as income rises and decreases as income falls.
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Inferior Good
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A good for which the demand increases as income falls, and decreases as income falls.
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Demographics
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The characteristics of a population with respect to age, race, and gender.
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Quantity supplied
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The amount of a good or service that a firm is willing and able to supply at a given price.
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Supply Schedule
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A table that shows the relationship between the price of a product and the quantity of the product supplied.
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Law of supply
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Holding everything else constant, increases in price cause increases in the quantity supplied, and decreases in price cause decreases in the quantity supplied.
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Technological Change
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A positive or negative change in the ability of a firm to produce a given level of output with a given amount of inputs.
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Market Equilibrium
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A situation in which quantity demanded equals quantity supplied.
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Competitive Market Equilibrium
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A market equilitbrium with many buyers and many sellers.
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Surplus
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A situation in which the quantity supplied is greater than the quantity demanded.
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Shortage
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A situation in which the quantity demanded is greater than the quantity supplied.
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What are the Variables that Shift Market Demand?
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*Prices of related Goods
*Income *Tastes *Population and Demographics *Expected Future Prices |
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What are the Variables that Shift Supply?
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*Prices of inputs
*Technological Change *Prices of substitutes in production *Expected future prices *Number of firms in the market |
