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31 Cards in this Set
- Front
- Back
- 3rd side (hint)
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Market
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a group of buyers and sellers of a particular good or service
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Buyers determine
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demand
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Sellers determine
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supply
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Competitive market
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a market in which there are many buyers and many sellers so that each has a negligible impact on the market price
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Perfectly competitive markets:
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the goods offered for sale are all exactly the same
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the buyers and sellers are so numerous that no single buyer or seller has any influence over the market price
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Demand curve
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the relationship between price and quantity demanded
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Quantity Demanded
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the amount of a good that buyers are willing and able to purchase
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Law of Demand
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the claim that other things equal the quantity demanded of a good falls when the price of the good rises
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Demand schedule
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a table that shows the relationship between the price of a good and the quantity demanded
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Market Demand
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the sum of all the individual demands for a particular good or service
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shift in demand curve to the right
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increase in demand
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shift in demand curve to the left
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decrease in demand
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Income
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lower income means less money to spend
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Normal good
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a good for which, other things equal, an increase in leads to an increase in demand
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Substitutes
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two goods for which an increase in the price of one leads to an increase in the demand for the other
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Complements
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two goods for which an increase in the price of one leads to an increase in the demand for the other
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Tastes
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your tastes decide demand
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Expectations
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your expectations for the future can change demand
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Supply curve
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the relationship between price and quantity supplied
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Quantity supplied
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the amount of a good that sellers are willing and able to sell
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Law of supply
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other things equal, the quantity supplied of a good rises when the price of the good rises
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Supply schedule
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a table hat shows the relationship between the price of a good and the quantity supplied
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Supply curve
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graph of the relationship between price and quantity supplied
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shift to right in supply curve
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increase in supply
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shift to left in supply curve
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decrease in supply
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Factors that affect supply
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input prices, technology, expectations, number of sellers
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Equilibrium
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a situation in which the market price has reached the level at which quantity supplied equals quantity demanded
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Equilibrium price
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the price that balances quantity supplied and quantity demanded
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surplus
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a situation in which quantity supplied is greater than quantity demanded
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movement along the curve
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shortage
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a situation in which quantity demanded is greater than quantity supplied
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movement along the curve
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Law of supply and demand
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the claim that the price of any good adjusts to bring the quantity supplied and the quantity demanded for that good into balance
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