Economics Chapter 3

Front 1

Demand

Back 1

A schedule or curve that shows the various amounts of a product that consumers will buy at each of a series of possible prices during a specific period.

*Is worded to apply to product markets. To adjust it to apply to Resource markets, substitute the word "resource for "product" and the word "businesses" for "consumers".

Front 2

Law of Demand

Back 2

The principle that, other things equal, as price Falls, the quantity demanded Rises, and as price Rises, the quantity demanded Falls.

Front 3

Demand Curve

Back 3

A curve illustrating the inverse relationship between the price of a product and the quantity of it demanded, other things equal.

Front 4

Determinants of Demand

Back 4

Factors other than price that locate the position of a demand curve.

Front 5

Normal Good

Back 5

A good or service whose consumption Rises when income increases and Falls when income decreases.

Front 6

Inferior Good

Back 6

A good or service is consumption declines when income Rises and Rises when income decreases.

Front 7

Substitute Good

Back 7

A good or service that can be used in place of some other good or service.

Front 8

Complementary Good

Back 8

A good or service that is used in conjunction with some other good or service.

Front 9

Change in Demand

Back 9

A change in the quantity demanded of a product at every price; a shift of the demand curve to the left or right.

Front 10

Change in Quantity Demand

Back 10

A movement from one point to another on a fixed demand curve.

Front 11

Supply

Back 11

A schedule or curve that shows the amounts of a product that producers are willing to make available for sale at each of a series of possible prices during a specific period.

Front 12

Law of Supply

Back 12

The principle that, other things equal, as price Rises, the quantity supplied Rises, and it's price Falls, the quantity supplied Falls.

Front 13

Supply Curve

Back 13

A curve illustrating the direct relationship between the price of a product in the quantity of it supplied, other things equal.

Front 14

Determinants of Supply

Back 14

Factors other than price that locate the position of the supply curve.

Front 15

Change in Supply

Back 15

A change in the quantity supplied of a product at every price; a shift of the supply curve to the left or right.

Front 16

Change in Quantity Supplied

Back 16

A movement from one point to another on a fixed supply curve.

Front 17

Equilibrium Price

Back 17

The price in a competitive market at which the quantity demanded and quantity supplied of a product are equal.

Front 18

Equilibrium Quantity

Back 18

The quantity demanded and quantity supplied that occurred at the equilibrium price in a competitive market.

Front 19

Surplus

Back 19

The amount by which the quantity supplied of a product exceeds the quantity demanded any specific (above-equilibrium) price.

Front 20

Shortage

Back 20

The amount by which the quantity demanded of a product exceeds the quantity supplied at a specific (below-equilibrium) price.

Front 21

Price Ceiling

Back 21

A legally established maximum (below-equilibrium) price for a product.

Front 22

Price Floor

Back 22

A legally established minimum (above-equilibrium) price for a product.

Front 23

Market

Back 23

A group of buyers and sellers who are interested in having the potential and freedom to trade.