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28 Cards in this Set

  • Front
  • Back
Market
a place or service that enables buyers and sellers to exchange goods and services
barter
the direct exchange of goods and services without the use of money
Double coincidence of wants
the situation that exists when A has what B wants and Bhas what A wants
transaction costs
the costs involved in making an exchange
relative price
the price of one good expressed in terms o the price of another good
quantity demanded
the amount of a product that people are willing and able to purchase at a specific price
law of demand
the quantity of well-defined good or service that people are willing and able to purchase durning a particular period of time.
Determinats of demand
factors other than the price of the good that influence demand: income, tastes, prices of related goods and services, expectations, # of buyers
demand shedule
a table or list of the prices and the corresponding quantities demanded of a particular good or service
demand curve
a graph of a demand schedule that measures price on the vertical axis and quantity demanded on the horizontal axis
normal goods
goods for which demand incteases as income increases
inferior goods
goods for which demand decteases as income increases
Substitute goods
goods that can be used in place of each other; as the price of one rises, the demand for the other rises
complementary goods
goods that are used together; as the price or one rises, the demand for the other falls
Supply
amount of a good or service that producers are willing and able to offer for sale at each possible price during a period of time, everything held const.
quantity supplied
the amount sellers are willing and able to offer at a given price during a particular period of time, everything else held constant
law of supply
quantity of well-defined good or service that producers are willing and able to offer for sale during a particular period of time
determinants of supply
factors other than the price of the good that influence supply: price of resources, technology production, expectations of producers, # of producers, price of related goods and services
supply schedule
table or list of prices and corresponding quantities supplied of a particular good or service
supply curve
graph of a supply schedule that measures price on the vertical axis and quantity supplied on the horizontal axis
productivity
the quantity of output produced per unit of resource
equilibrium
the price and quantity at which quantity demanded and quantity supplied are equal
disequilibrium
a point at which quantity demanded and quantity supplied are not equal at a particular price
surplus
a quantity supplied that is larger than the quantity demanded at a given price; it occurs whenever the price is greater than the equilibrium price
shortage
a quantity supplied that is smaller than the quantity demanded at a given price; it occurs whenever the price is less than the equilibrium price
exchange rate
the rate at which monies of different countries are exchanged
price floor
a situation in which the price is not allowed to decease below a certain level
price ceiling
a situation in which the price is not allowed ot rise above a certain level