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31 Cards in this Set
- Front
- Back
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Market |
A group of buyers and sellers of a particular good or service |
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Competitive market |
The market in which there are many buyers and sell era to that each has a negligible impact on the market price |
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Monopoly |
Market with one seller |
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Quantity demanded |
The amount of a good that buyers are willing and able to purchase |
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Law of demand |
The claim that, other things equal, the quantity demanded of a good falls when the price of a good rises |
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Demand schedule |
A table that shows the relationship between the price of a good and the quantity demanded |
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Demand curve |
A graph of the relationship between the price of a good and the quantity demanded |
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Normal good |
A good for which, other things equal, an increase in income leads to an increase in demand |
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Inferior good |
A good for which other things equal, an increase in inform leads to a decrease in demand |
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Substitutes |
Two foods for which an increase in the price of one leads to an increase in the demand for the other |
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Complements |
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 |
A good for which, other things equal, an increase in income leads to a decrease in demand |
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Law of supply |
The claim that, other things equal, the quantity supplied if a good rises when the price of a good rises |
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Supply schedule |
A table that shows the relationship between the price of a good and the quantity supplied |
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Supply curve |
A graph of the relationship between the price of a good and the quantity supplied |
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Equilibrium |
A situation in which the price has reached the level where quantity supplied equals quantity demanded |
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Equilibrium price |
The price that balances quantity supplied and quantity demanded |
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Equilibrium quantity |
The quantity supplied and the quantity demanded at the equilibrium price |
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Surplus |
A situation in which quantity supplied is greater than quantity demanded |
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Shortage |
A situation in which quantity demanded is greater than quantity supplied |
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Law of supply and demand |
The claim that the price of any good adjusts to bring the quantity supplied and quantity demanded for that good into balance |
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True or false: if apples and oranges are substitutea, an increase in the price of apples will decrease the demand for oranges |
False |
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True or false. If golf clubs and gold balls are complements, an increase in the price of golf clubs will decrease the demand for golf balls |
True |
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True or false. If consumers expect the price of shoes to rise, there will be an increase in the demand for shoes today |
True |
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True or false. An increase in the price of steel will shift the supply of automobiles to the right |
False |
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True or false. When the price of a good in below the equilibrium, it causes a surplus |
False |
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True or false. If there is a shortage of a good, then the price of that good tends to fall |
False |
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True or false. If pencils and paper are complements, an increase in the price of pencils cause the demand for paper to decrease or shift to the left |
True |
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True or false. If coca cola and pepsi are substitutes, an increase in the price of coca cola will cause an increase in the equilibrium price and quantity in the market for pepsi |
True |
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True or false. An advance in the technology employed to manufacture roller blades will result in a decrease in the equilibrium price and an increase in the equilibrium quantity in the market for roller blades |
True |
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True or false. If there is an increase in supply accompanied by a decrease in demand for coffee, then there will be a decrease in both the equilibrium price and quantity of the market for coffee |
False: double shift |
