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19 Cards in this Set
- Front
- Back
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Demand
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The amount of a good that will be bought at given prices over a period of time.
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Market
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A set of arrangements allowing buyers and sellers to communicate and exchange goods and services.
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Price Mechanism
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The automatic determination of prices and the allocation of resources buy the operation of markets in the economy.
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Supply
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The amount of a good that sellers are prepared to sell at given prices over a period of time.
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Demand Curve
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A line drawn on a graph which shows how much of a good will be bought at different prices.
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Effective Demand
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The amount of a good people are willing to buy at given prices over a given period of time backed by the ability pay.
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Complementary Goods
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Goods purchased together because they are consumed together.
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Inferior Good
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A good for which demand will fall if income rises or rise if income falls.
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Normal Good
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A good for which demand will rise if income rises or fall if income falls.
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Shift in the Demand Curve
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A movement to the left or right of the entire demand curve when there is a change in any factor affecting demand except price e.g. Weather or Demographics (age of population).
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Substitute Goods
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Goods bought as an alternative to another but perform the same function.
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Supply Curve
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A line drawn on a graph which shows how much of a good sellers are willing to supply at different prices.
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Advalorem Tax
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A tax levied (impose) as a percentage of the price of a good.
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Indirect Tax
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Taxes Imposed by the government on spending. e.g. VAT
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Specific Tax
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A lump sum tax on the amount sold per unit.
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Subsidy
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A grant Given to Producers usually to encourage production of a certain good.
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Equilibrium Price
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Price where supply and demand are equal.
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Market Clearing Price
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Price where the amount supplied in a market matches exactly the amount demanded.
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Total Revenue
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The amount of money generated by the sale of goods. (P x Q)
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