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