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30 Cards in this Set
- Front
- Back
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Law of Demand
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*economic rule stating that the quantity demanded and price move in opposite directions.
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Quantity Demanded
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*the amount of a good or service that a consumer is willing and able to purchase at a specific price.
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Law of Diminishing Utility
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Rule stating that the additional satisfaction a consumer gets from purchasing one more unit of a product will lessen with each additional unit purchased.
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Marginal Utility
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*an additional amount of satisfaction
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Utility
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*the ability of any good or service to satisfy consumer wants
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Demand Schedule
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the table showing quantities demanded at different possible prices
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Demand Curve
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*downward sloping line that shows in graph form the quantities demanded at each possible price.
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Determinants of Demand
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*a change in the demand for a particular item shifts the entire demand curve (to the left or right)
1. population 2. income 3.tastes and preferences 4. substitutes 5. complementary goods. |
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Elastic
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*economic concept dealing with consumers responsivemenss to an increase or decrease in the price of a product.
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Inelastic
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*price change does NOT result in a change in the quantity demanded.
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What causes Price Elasticity of Demand?
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1. existence of substitutes
2. % of a person's total budget devoted to purchase that good 3. time consumers are given to adjust to a change in price. |
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What causes Price Elasticity of Demand?
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1. existence of substitutes
2. % of a person's total budget devoted to purchase that good 3. time consumers are given to adjust to a change in price. |
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Supply schedule
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table showing quantities supplied at different possible prices
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What causes Price Elasticity of Demand?
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1. existence of substitutes
2. % of a person's total budget devoted to purchase that good 3. time consumers are given to adjust to a change in price. |
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Supply Curve
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Upward slopping line that shows in graph form the quantities supplied at each possible price.
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Supply schedule
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table showing quantities supplied at different possible prices
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Determinants of Supply
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*a change in the supply of a particular item shifts the entire supply curve tot he left or the right.
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Supply schedule
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table showing quantities supplied at different possible prices
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Supply Curve
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Upward slopping line that shows in graph form the quantities supplied at each possible price.
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Supply Curve
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Upward slopping line that shows in graph form the quantities supplied at each possible price.
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Determinants of the supply
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1. price of inputs
2. # of firms in the industry 3. taxes 4. technolgy |
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Determinants of Supply
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*a change in the supply of a particular item shifts the entire supply curve tot he left or the right.
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Determinants of the supply
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1. price of inputs
2. # of firms in the industry 3. taxes 4. technolgy |
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Determinants of Supply
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*a change in the supply of a particular item shifts the entire supply curve tot he left or the right.
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Determinants of the supply
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1. price of inputs
2. # of firms in the industry 3. taxes 4. technolgy |
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Equilibrium Price
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*the price at which the amount of producers are willing to supply is equal to the amount consumers are willing to buy.
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Shortages
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*situation in which the quantity demanded is greater than the quantity supplied at the current price.
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Surplus
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*situation in which quanity supplied is greater than quantity demanded at the current price.
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Price Ceilings
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*a legal maximum price that may be charged for a particular good or service.
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Price Floor
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*Government-set minimum price that can be charged for goods and services.
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