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25 Cards in this Set
- Front
- Back
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What is demand |
the willingness and ability of buyers to purchase different quantities of a good at different prices during a specific time period |
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Market |
anyplace people come together to trade |
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Law of Demand |
As the price of a good rises, the quantity demanded of the good falls, the quantity demanded of the good rises. |
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Demand Schedule |
the numerical tabulation of the quantity demanded of a good at different prices. |
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Demand Curve |
the graphical representation of the law of demand |
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Law of Diminishing Marginal Utility |
For a given time period, the marginal utility or satisfaction gained by consuming equal succesive units of a good will decline as the amount consumed increases. |
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Own Price |
the price of a good. |
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Normal Good |
a good for which demand rises as income rises |
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Inferior Good |
a good for which demand falls (rises) as income rises (falls) |
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Neutral Good |
a good for which demand does not change as income rises or falls |
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Substitutes |
two goods that satisfy similar needs or desires. |
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Complements |
Two goods that are used jointly in consumption |
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Law of Supply |
as the price of a good rises, the quantity supplied of the food rises and as he price of a good falls the quantity supplied of the good falls. |
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Supply Cure (Upward Sloping) |
the graphical representation if the law of supply |
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Supply Schedule |
the numerical tabulation of the quantity supplied of a good at different prices. |
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Subsidy |
A monetary payment by government to a producer of a good or service. |
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Surplus (Excess Supply) |
A condition in which the quantity supplied is greater than the quantity demanded. |
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Shortage |
A condition in which the quantity demanded is greater than the quantity supplied |
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Equilibrium Price |
The price at which the quantity demanded of the good equals the quantity supplied |
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Equilibrium Quantity |
The quantity that corresponds to equilibrium price. |
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Disequlibrium Price |
A price other than equilibrium price. A price at which quantity demand does not meet quantity supplied. |
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Equilibrium |
At rest. Buyers or sellers do not intend to move away. |
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Consumers Surplus |
the difference between the maximum price of a buyer is willing and able to pay for good or service and the price actually paid. |
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Producers (Sellers) Surplus |
The difference between the oruce sellers receive for a good and the minimum or lowest price for which they would have sold the good. |
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Total Surplus |
The sum of consumers surplus and producers surplus |
