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20 Cards in this Set
- Front
- Back
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Market
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A group of buyers and sellers of a particular good or service.
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Competitive Market
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A market in which there are many buyers and many sellers so that each has a negligible impact on the market price.
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Quantity Demanded
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The amount of a good that buyers are willing and able to purchase.
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Law of Demand
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The claim that, other things equal, the quantity demanded of a good falls when the price of the good rises.
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Demand Schedule
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A table that shows the relationship between the price of a good and the quantity demanded.
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Demand Curve
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A graph of the relationship between the price of a good and the quantity demanded.
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Normal Good
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A good for which, other things equal, an increase in income leads to an increase in demand.
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Inferior Good
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A good for which, other things equal, an increase in income leads to a decrease in demand.
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Substitiutes
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Two goods for which an increase in the price of one leads to an increase in the demand for the other.
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Complements
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Two goods for which an increase in the price of one leads to a decrease in the demand for the other.
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Quantity Supplied
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The amount of a good that sellers are willing and able to sell.
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Law of Supply
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The claim that, other things equal, the quantity supplied of a good rises when the price of the good rises.
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Supply Schedule
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A table that shows the relationship between the price of a good and the quantity supplied.
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Supply Curve
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A graph of the relationship between the price of a good and the quantity supplied.
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Equilibrium
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A situation in which the market price has reaches the level at which quantity supplied equals quantity demanded.
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Equilibrium Price
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The price that balances quantity supplied and quantity demanded.
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Equilibrium Quantity
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The quantity supplied and the quantity demanded at the equilibrium price.
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Surplus
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A situation in which quantity supplied is greater than quantity demanded.
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Shortage
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A situation in which quantity demanded is greater than quantity supplied.
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Law of supply and demand
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The claim that the price of any good adjusts to bring the quantity supplied and the quantity demanded for that good into balance.
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