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15 Cards in this Set

  • Front
  • Back
demand
a schedule showing a series of prices and quantities that consumer would be willing and able to buy at a specific point in time.
determinants of demand
changes in taste, income, number of buyers, and related goods which cause a fundamental change in the way that consumers view a particular product or service
determinants of supply
changes in resource prices, technology, expectations, related goods, taxes and subsidies or the number of producers which cause a fundamental change in the way that producers view a particular product or service
equilibrium
that point in an individual market where quantity demanded equals quantity supplied. It is always where the curves cross - the market is cleared with no surplus or shortage
law of demand
this law assumes an inverse relationship between price and quantity. At a higher price, quantity demanded declines - at a lower price, the quantity demanded increases.
law of supply
this law assumes a direct relationship between price and quantity. At a higher price, producers will produce more. At a lower price, the quantity will decline.
market shortage
the quantity demanded is greater than the quantity supplied
market surplus
the quantity supplied is greater than the quantity demanded
market system
where buyers and sellers meet. It provided for the free interaction of buyer and seller in the market place.
price ceiling
government sets a price that is below the equilibrium price
price floor
government sets a price that is above the equilibrium price
price function
in a market, price measures scarcity. If the product is more scarce, price goes up; if less scarce, it will go down. Price is an important mechanism for allocating scarce resources in a market.
pure competition
a large number of independently acting buyers and sellers in a market place where no one producer can unduly affect that market.
quantity demanded
on a demand schedule, this is one amount that corresponds to one price. A change in price will change this.
quantity supplied
on a supply schedule, this is one amount that corresponds to one price. A change in price will change this.