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19 Cards in this Set
- Front
- Back
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market
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arrangements individuals have for exchanging with each other
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law of demand
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when prices go up, people buy less. when prices go down, people buy more.
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relative price
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unit price specified as units of another commodity
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money price
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unit price as specified in dollars
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demand curve
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inverse curve of price versus quantity sold
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market demand
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calculated by adding demand curves of multiple buyers
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shift in demand
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moves the demand line left or right
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normal goods
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goods that gain more demand as income increases
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inferior goods
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goods that lose demand as income increases
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substitutes
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a alternate good. butter and margerine
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complements
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linked goods, when one goes up, hurts sales of the other. PCs and printers.
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supply
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amount of goods companies are willing to produce
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law of supply
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the more expensive a good is, the more companies will make of a good
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supply curve
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price of goods versus quantity supplied. directly proportional
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subsidies
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a negative tax
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market clearing price
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the minimum price at which all the goods available sell
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equilibrium
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when quantity supplied equals the quantity demanded
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shortage
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when quantity supplied is lower than demand
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surplus
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when the quantity supplied is greater than demand
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