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26 Cards in this Set
- Front
- Back
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A group of buyers and sellers of a particular good or service
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Market
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A market in which there are many buyers and sellers so that each has a negligible impact on the market price
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Competitive Market
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The amount of a good that buyers are willing and able to purchase
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Quanity Demanded
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The claim that, other things equal, the quanity demanded of a good falls when the price of a good rises
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Law of Demand
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A table that shows the relationship between quanity demanded and the price of a good
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Demand Schedule
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A graph of the relationship between the price of a good and the quanity demanded
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Demand Curve
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A good for which, other things equal, an increase in income leads to an increase in demand
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Normal good
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A good for which, other things equal, an increase in income leads to a decrease in demand.
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Inferior good
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Two goods for which an increase in the price in one leads to an increase in demand in the other.
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Substitutes
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Two goods for which an increase in the price of one leads to a decrease in the demand of another
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complements
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The amount of a good that sellers are willing and able to sell
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Quanity Supplied
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The claim that, other things equal, the quanity supplied of a good rises when the price of the good rises.
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Law of Supply
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A table that shows the relationship between the price of a good and the quanity supplied
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Supply Schedule
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A graph of the relationship between the price of a good and the quanity supplied
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Supply Curve
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A situation in which the market price has reached the level at which the quanity supplied equals the quanity demanded
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Equilibrium
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The price that balances quanity supplied and quanity demanded
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Equilibrium Price
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The quanity supplied and quanity demanded at the equilibrium price
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Equilibrium Quanity
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A situation in which quanity supplied is greater than quanity demanded
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Surplus
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A situation in which quanity demanded is greater than quanity supplied
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Shortage
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The claim that the price of any good adjusts to bring the quanity supplied and the quanity demanded for that good into balance
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Law of Supply and Demand
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The measure of responsiveness of quanity demanded or quanity supplied to on of its determinates
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Elasticity
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The measure of how much the quanity demanded of a good responds to a change in the price of that good, computed as a percentage change in quanity demanded divided by the percentage change in price
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Price Elasticity of Demand
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The amount paid by buyers and received by sllers of a good, computed as the price of the good times the quanity sold
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Total Revenue
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A measure of how much the quanity demanded of a good responds to a change in a consumers' income, computed as the percentage change in quanity demanded divided by percentage change in income
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Income Elasticity of Demand
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A measure of how much the quanity demanded of one good responds to a change in the price of another good, computed as the percentage change in quanity demanded of the first good divided by the percentage change in the price of a second good
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Cross Price elasticity of demand
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Measure of how much the quanity supplied of a good responds to a change in the price of that good, computed as the percentage change in quanity supplied divided by the percentage change in price
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Price elasticity of Supply
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