Macroecon Chapter 3

Front 1

demand

Back 1

is a schedule or a curve that shows the variouse amounts of a product that consumers are willing ans able to purchase at each of a series of possible prices during a specified period of time

Front 2

demand schedule

Back 2

demand can easily be shown in table form. the table is hypothetical demand schedule.

Front 3

law of demand

Back 3

states that there is an inverse or negative relationship between price and quantity demanded .

Front 4

diminishing marginal utility

Back 4

after a point, consumers get less satisfaction or benefit from consuming more and more and more units

Front 5

income effect

Back 5

a higher price for a good decreased the purchasing power of consumers incomes so they cant buy as much of the goods

Front 6

substitution effect

Back 6

a higher price for a good decreases the purchasing power of consumers incomes so they cant buy as much of the goods

Front 7

demand curve

Back 7

has a downward slope and is a graphic representation of the law of demand .

Front 8

determinants of demand

Back 8

are consumer tastes ( preferences) the number of buyers in the market, consumers income the prices of related goods and consumer expectations.

Front 9

normal good

Back 9

one where income and demand are positively related`

Front 10

inferior good

Back 10

one where income and demand are negatively related

Front 11

substitute good

Back 11

one that can be used in place of another

Front 12

complementary good

Back 12

one that is used with another good

Front 13

change in demand

Back 13

means that the entire demand curve or schedule has changed because of a change in one of the above determinants of demand

Front 14

change in the quantity demanded

Back 14

means that there has been a movement along an existing demand curve or schedule because of a change in price

Front 15

supply

Back 15

is a schedule of prices and the quantities that seller will sell at each of theres prices during some period of time

Front 16

law of supply

Back 16

shows a positive relationship between price and quantity supplied other things equal as the price of the good increases more quantities will be offered for sale.

Front 17

supply curve

Back 17

is a graphic representation of supply and law of supply it has an upward slope indicating the positive relationship between price and quantity supplied

Front 18

determinants of supply

Back 18

are changes in resources, technology , taxes, and subsidies, prices of other goods, prices expectation , and the number of seller in a market.

Front 19

change in supply

Back 19

is an icrease or decreas in the entire supply schedule and the supply curve. it is the sresult of a change in one or more of the determinants of supply that affect the cost of production

Front 20

change in supply

Back 20

means that the entire supply curve or schedule has changed because of a change in one of the above determinants of supply

Front 21

change in the quantity supplied

Back 21

means that there has been a movement along an existing supply curve or schedule because of a change in price

Front 22

equilibrium price

Back 22

or market clearing price of a product is that price at which quantity demanded and quantity supplied are equal.

Front 23

equilibrium price

Back 23

or market clearing price of a product is that price at which quantity demanded and quantity supplied are equal

Front 24

equilibrium quantity

Back 24

is equal to the quantity demanded and supplied at the equilibrium price

Front 25

surplus

Back 25

or excess supply. the quantity demanded is less than the quantity supplied at that price.

Front 26

shortages

Back 26

or excess demand

Front 27

productive efficiency

Back 27

in which the goods and services society desires are being produced in the least costly way.

Front 28

allocative efficiency

Back 28

in which resources are devoted to the production of goods and services society most highly values

Front 29

price ceiling

Back 29

set by government prevents price from performing its rationing function in a market system

Front 30

price floor

Back 30

is a minimum price set by government for the sale of a product or resource.

Front 31

change in demand with change in quantity demanded

Back 31

a change in demand causes the entire demand curve to shift whereas a change in quantity demanded is simply a movement along an existing demand curve .

Front 32

price ceiling

Back 32

below the equilibrium price and show the resulting shortage in the market for a product.

Front 33

price floor

Back 33

above the equilibrium price and show the resulting surplus.