Economics

Front 1

law of supply

Back 1

The positive relationship between price and quantity of a good supplied: an increase in market price will lead to an increase in quantity supplied, and a decrease in market price will lead to a decrease in quantity supplied.

Front 2

supply curve

Back 2

A graph illustrating how much of a product a firm will supply at different prices

Front 3

market supply

Back 3

the sum of all that is supplied each periods by all producers of a single product

Front 4

equilibrium

Back 4

The condition that exists when quantity supplied and quantity demanded are equal. At equilibrium, there is not tendency for price to change.

Front 5

excess demand or shortage

Back 5

The condition that exists when quantity demanded exceeds quantity supplied at the current price

Front 6

excess supply or surplus

Back 6

The condition that exists when quantity supplied exceeds quantity demanded at the current price

Front 7

firm

Back 7

an organization that transforms resources (inputs) into products (outputs). Firms are the primary producting units in a market economy.

Front 8

entrepreneur

Back 8

A person who organizes, manages, and assumes the risks of a firm, taking a new idea or a new product and turning it into a successful business

Front 9

households

Back 9

the consuming units in an economy

Front 10

product or out put markets

Back 10

the markets in which goods and services are exchanged

Front 11

input or factor markets

Back 11

the markets in which the resources used to produce products are exchanged

Front 12

labor markets

Back 12

the input/factor market in which households supply work for wages to firms that demand labor

Front 13

capital market

Back 13

the input/factor market in which households supply their savings, for interest or for claims to future profits, to firms that demand funds to buy capital goods

Front 14

land market

Back 14

the input/factor market in which households supply land or other real property in exchange for rent

Front 15

factors of production

Back 15

The inputs into the production process. Land, labor, and capital are the three key factors of production

Front 16

quantity demanded

Back 16

The amount of a product that a household would buy in a given period if it could buy all it wanted at the current market price.

Front 17

demand schedule

Back 17

A table showing how much of a given product a household would be willing to buy at different prices

Front 18

demand curve

Back 18

A graph illustrating how much of a given product a household would be willing to buy at different prices.

Front 19

law of demand

Back 19

The negative relationship between price and quantity demanded: as price rises, quantity demanded decreases> As price falls, quantity demanded increases.

Front 20

income

Back 20

The sum of all a household’s wages, salaries, profits, interest payments, rents, and other forms of earnings in a given period of time. It is a flow measure

Front 21

wealth or net worth

Back 21

The total value of what a household owns minus what it owes. It is a stock measure

Front 22

normal goods

Back 22

Goods for which demand goes up when income is higher and for which demand goes down when income is lower

Front 23

inferior goods

Back 23

Goods for which demand tends to fall when income rises

Front 24

subsitutes

Back 24

Goods that can serve as replacements for one another; when the price of one increases, demand for the other goes up.

Front 25

perfect subsitutes

Back 25

Identical products

Front 26

complements, complementary goods

Back 26

Goods that “go together”; a decrease in price of one results in an increase in demand for the other, and vice versa.

Front 27

shift of a demand curve

Back 27

The change that takes place in a demand curve corresponding to a new relationship between quantity demanded of a good and price of that good. The shift is brought about by a change in the original conditions.

Front 28

movement along a demand curve

Back 28

The change in quantity demanded brought about by a change in price.

Front 29

market demand

Back 29

The sum of all the quantities of a good or service demanded per period by all the households buying in the market for that good or service.

Front 30

profit

Back 30

The difference between revenues and costs

Front 31

quantity supplied

Back 31

The amount of a particular product that a firm would be willing and able to offer for sale at a particular price during a given time period.

Front 32

supply schedule

Back 32

A table showing how much of a product firms will supply at different prices.