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19 Cards in this Set
- Front
- Back
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ceteris paribus conditions
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determinents of the relationshp between price and quantity that are unchanged along a curve; changes in these factos cause the curve to shift
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complements
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two goods are complements if both are used together for consumption or enjoyment. (coffee and cream)
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demand
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a schedule or how much of a good or service people will purchase at any price during a specified time period
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demand curve
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graphical representation of the demand schedule. negatively sloped line showing inverse relationship between the price and quantity
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equilibrium
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the situation when quantity supplied equals quantity demanded at a particular price
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inferior goods
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goods for which demand falls as income rises
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law of demand
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the observatin that there is a negative, or inverse, relationship between the price of any good or service and the quantity demanded
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law of supply
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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
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market
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all of the arrangements that indivuduals have for exchanging with one another.
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market clearing
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the price that clears the market, at which quantity demanded equals quantity supplied; the price where the demand curve intersects the supply curve
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money price
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the price that we observe today
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market demand
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the demand of all consumers in the marketplace for a particular good or service.
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normal goods
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goods for which demand rises as income rises. most goods are normal goods
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relative price
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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
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shortage
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a situation in which quantity demand is greater than wuantity supplied at a price below market cleaing price.
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subsidy
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a negative tax, a payment to a producer from the government, usually in the form of a cash grant per unit
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substitutes
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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)
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supply curve
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the graphical representaion of the supply schedule; a line showing the supply schedule which generally sloes upward.
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surplus
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a situation in which quantity supplied is greater than quantity demanded at a price above the market clearing price.
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