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19 Cards in this Set

  • Front
  • Back
ceteris paribus conditions
determinents of the relationshp between price and quantity that are unchanged along a curve; changes in these factos cause the curve to shift
two goods are complements if both are used together for consumption or enjoyment. (coffee and cream)
a schedule or how much of a good or service people will purchase at any price during a specified time period
demand curve
graphical representation of the demand schedule. negatively sloped line showing inverse relationship between the price and quantity
the situation when quantity supplied equals quantity demanded at a particular price
inferior goods
goods for which demand falls as income rises
law of demand
the observatin that there is a negative, or inverse, relationship between the price of any good or service and the quantity demanded
law of supply
the observation that the higher the price of a good, the more of that good sellers will make available over a specified period of time
all of the arrangements that indivuduals have for exchanging with one another.
market clearing
the price that clears the market, at which quantity demanded equals quantity supplied; the price where the demand curve intersects the supply curve
money price
the price that we observe today
market demand
the demand of all consumers in the marketplace for a particular good or service.
normal goods
goods for which demand rises as income rises. most goods are normal goods
relative price
the price of one commodity divided by the price of another commodity; the number of units of one commondity that must be sacrificed to purchase one unity of another commodity
a situation in which quantity demand is greater than wuantity supplied at a price below market cleaing price.
a negative tax, a payment to a producer from the government, usually in the form of a cash grant per unit
two goods are substitutes when either one can be used for consumption to satisy a similar want. (coffee and tea, the more you buy of one, the less you buy of another)
supply curve
the graphical representaion of the supply schedule; a line showing the supply schedule which generally sloes upward.
a situation in which quantity supplied is greater than quantity demanded at a price above the market clearing price.