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23 Cards in this Set

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  • Back
Quantity demanded
The amount of a good or service that a consumer is willing and able to purchase at a given price.
Demand schedule
A table showing the relationship between the price of a product and the quantity of the product demanded.
Demand curve
A curve that shows the relationship between the price of a product and the quantity of the product demanded.
market demand
The demand by all the consumers of a given good or service.
Law of demand
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.
Substitution effect
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.
Income effect
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.
Ceteris paribus
("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.
Substitutes
Goods and services that can be used for the same purpose.
Complements
Goods that are used together.
Normal Good
A good for which the demand increases as income rises and decreases as income falls.
Inferior Good
A good for which the demand increases as income falls, and decreases as income falls.
Demographics
The characteristics of a population with respect to age, race, and gender.
Quantity supplied
The amount of a good or service that a firm is willing and able to supply at a given price.
Supply Schedule
A table that shows the relationship between the price of a product and the quantity of the product supplied.
Law of supply
Holding everything else constant, increases in price cause increases in the quantity supplied, and decreases in price cause decreases in the quantity supplied.
Technological Change
A positive or negative change in the ability of a firm to produce a given level of output with a given amount of inputs.
Market Equilibrium
A situation in which quantity demanded equals quantity supplied.
Competitive Market Equilibrium
A market equilitbrium with many buyers and many sellers.
Surplus
A situation in which the quantity supplied is greater than the quantity demanded.
Shortage
A situation in which the quantity demanded is greater than the quantity supplied.
What are the Variables that Shift Market Demand?
*Prices of related Goods
*Income
*Tastes
*Population and Demographics
*Expected Future Prices
What are the Variables that Shift Supply?
*Prices of inputs
*Technological Change
*Prices of substitutes in production
*Expected future prices
*Number of firms in the market