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21 Cards in this Set

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  • Back
Law of Demand
1) Quantity demanded rises as price falls, other things constant
2) Quantity demanded falls as price rises, other things constant
demand curve
the graphic representation of the relationship between price and quantity demanded (per unit time)
Demand
refers to a schedule of quantitites of a good that will be bought per unit of time at various prices, other things constant
Quantity Demanded
refers to a specific amount that will be demanded per unit of time at a specific price, other things constant
Shift Factors of Demand
1) Society's income
2) The prices of other goods
3) Tastes
4) Expectations
5) Taxes on and subsidies to consumers
market demand curve
the horizontal sum of all individual demand curves
Law of Demand (market)
1) at lower prices, existing demanders buy more
2) at lower prices, new demanders enter the market
Law of Supply
1) Quantity supplied reises as price rises, all things constant
2) Quantity supplied falls as price falls, other things constant
Supply Curve
the graphical represenation of the relatoinship between price and quantity supplied (directly)
Supply
refers to a schedule of quantities a seller is willing to sell per unit of time at various prices, other things constant
Quantity Supplied
refers to a specific amount that will be supplied at a specific price
movement along a supply curve
the graphical representation of the effect of a change in price on the quantity supplied
shift in supply
the graphical representation of the effect of a change in a factor other than price on supply
market supply cuve
the horizontal sum of all individual supply curves
Equilibrium
a concept in which opposing dynamic forces cancel each other out
Equilibrium price
the price toward which the invisible hand drives the market
Equilibrium quantity
the amount bough and sold at the equilibrium price
excess supply
quanity supplied is greater than quantity demanded
Excess demand
quanatity dmenaded is greater than quanity supplied
Price Adjusts
1) when quantity demanded is greater than quanityt supplied, prices tend to rise
2) when quanitity supplied is greater than quantity demanded, prices tend to fall
fallacy of composition
the false assumption that what is true for a par will also be true for the whole