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30 Cards in this Set
- Front
- Back
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Demand |
The relationship between price and the quantity demanded of a certain good or service |
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Price |
what a buyer pays for a unit of the specific good or service |
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Quantity Demanded |
the total number of units of a good or service consumers are willing to purchase at a given price |
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Law of demand |
The common relationship that a higher price leads to a lower quantity demanded of a certain good or service and a lower price leads to a higher quantity demanded, while all other variables are held constant |
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Demand schedule |
a table that shows a range of prices for a certain good or service and the quantity demanded at each price |
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Demand Curve |
a graphic representation of the relationship between price and quantity demanded of a certain good or service, with quantity on the horizontal axis and the price on the vertical axis |
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Supply |
the relationship between price and the quantity supplied of a certain good or service |
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Quantity suplied |
the total number of units of a good or service producers are willing to sell at a given price |
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Law of supply |
the common relationship that a higher price leads to a greater quantity supplied and a lower price leads to a lower quantity supplied, while all other variables are held constant |
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Suply schedule |
a table that shows a range of prices for a good or service and the quantity supplied at each price |
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Supply curve |
a line that shows the relationship between price and quantity supplied on a graph, with quantity supplied on the horizontal axis and price on the vertical axis |
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equilibrium |
the situation where quantity demanded is equal to the quantity supplied; the combination of price and quantity where there is no economic pressure from surpluses or shortages that would cause price or quantity to change |
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equilibrium price |
the price where quantity demanded is equal to quantity supplied |
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equilibrium quantity |
the quantity at which quantity demanded and quantity supplied are equal for a certain price level |
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excess supply or surplus |
at the existing price, quantity supplied exceeds the quantity demanded |
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excess demand or shortage |
at the existing price, the quantity demanded exceeds the quantity supplied; also called a shortage |
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Cateris pribus |
other things being equal |
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Normal Good |
a good in which the quantity demanded rises as income rises, and in which quantity demanded falls as income falls |
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Inferior good |
a good in which the quantity demanded falls as income rises, and in which quantity demanded rises and income falls |
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Subtitute |
a good that can replace another to some extent, so that greater consumption of one good can mean less of the other |
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Complement |
goods that are often used together so that consumption of one good tends to enhance consumption of the other |
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Shift in demand |
when a change in some economic factor (other than price) causes a different quantity to be demanded at every price |
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Shift in supply |
when a change in some economic factor (other than price) causes a different quantity to be supplied at every price |
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inputs or factors of production |
the combination of labor, materials, and machinery that is used to produce goods and services |
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Price controls |
government laws to regulate prices instead of letting market forces determine prices |
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Price ceiling |
Legal max price |
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Price floor |
Legal minimun price |
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producer surplus |
the extra benefit producers receive from selling a good or service, measured by the price the producer actually received minus the price the producer would have been willing to accept |
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social surplus or economic surplus or total surplus |
the sum of consumer surplus and producer surplus |
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deadweight loss |
the loss in social surplus that occurs when a market produces an inefficient quantity |
