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17 Cards in this Set
- Front
- Back
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Law of Demand |
The principle that there is an inverse relationship between the price of a good and the quantity buyers are willing to purchase in a defined time period, ceteris paribus. |
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Demand |
A curve or schedule showing the various quantities of product consumers are willing to purchase at possible prices during a specified period of time, ceteris paribus. |
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Change in Quantity Demanded |
A movement between points along a stationary demand curve, ceteris paribus. |
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Change in Demand |
An increase or a decrease in the quantity demanded at each possible price. An increase in demand is a rightward shift in the entire demand curve. A decrease in demand is a leftward shift in the entire demand curve. |
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Normal Good |
Any good for which there is a direct relationship between changes in income and its demand curve |
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Inferior Good |
Any good for which there is an inverse relationship between changes in income and its demand curve. |
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Substitute Good |
A good that competes with another good for consumer purchases. As a result, there is a direct relationship between a price change for one good and the demand for its "competitor" good. |
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Complementary Good |
A good that is jointly consumed with another good. As a result, there is an inverse relationship between a price change for one good and the demand for its "go together" good. |
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Law of Supply |
The principle that there is a direct relationship between the price of a good and the quantity sellers are willing to offer for sale in a defined time period, ceteris paribus. |
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Supply |
A curve or schedule showing the various quantities of a product sellers are willing to produce and offer for sale at possible prices during a specified period of time, ceteris paribus. |
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Change in Quantity Supplied |
A movement between points along a stationary supply curve, ceteris paribus. |
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Change in Supply |
An increase or a decrease in the quantity supplied at each possible price. An increase in supply is a rightward shift in the entire supply curve. A decrease in supply is a leftward shift in the entire supply curve. |
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Market |
Any arrangement in which buyers and sellers interact to determine the price and quantity of goods and services exchanged. |
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Surplus |
A market condition existing at any price where the quantity supplied is greater than the quantity demanded. |
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Shortage |
A market condition existing at any price where the quantity supplied is less than the quantity demanded. |
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Equilibrium |
A market condition that occurs at any price and quantity at which the quantity demanded and quantity supplied are equal. |
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Price System |
A mechanism that uses the forces of supply and demand to create an equilibrium through rising and falling prices. |
