Econ 160 Test One (Ch 2)

Front 1

Demand Curve

Back 1

- a graphical representation of the relationship between the price of a good and the quantity of that good that buyers demand.

Front 2

Law of demand

Back 2

the principle that an inverse relationship exists between the price of a good and the quantity of that good that buyers demand, other things being equal.

Front 3

Change in quantity demanded-

Back 3

a change in the quantity of a god that buyers are willing and able to purchase that results from a change in the good’s price, other things being equal, shown by a movement from one point to another along a demand curve.

Front 4

Change in demand-

Back 4

a change in the quantity of a good that buyers are willing and able to purchase that result from a change in some condition other than the price of that good, shown by a shift in the demand curve.

Front 5

Substitute-

Back 5

a pair of goods for which an increase in the price of one causes an increase in the price of one causes an increase in demand for the other.

Front 6

Complementary

Back 6

a pair of goods for which an increase in the price of one results in a decrease in demand for the other and vice versa.

Front 7

Normal good-

Back 7

a good for which an increase in consumer income results in an increase in demand

Front 8

Inferior good-

Back 8

a good for which an increase in consumer incomes results in a decrease in demand.

Front 9

Supply curve

Back 9

a graphical representation of the relationship between the price of a good and the quantity of that good that sellers are willing to supply

Front 10

Change in quantity supplied

Back 10

a change in the quantity of a good that suppliers are willing and able to sell that results from a change in the good’s price, other things being equal; shown by a movement along a supply curve.

Front 11

Change in supply

Back 11

a change in the quantity of a good that suppliers are willing and able to sell that results from a change in some condition other than the good’s price; shown by a shift in the supply curve.

Front 12

Equilibrium-

Back 12

a condition in which buyers’ and sellers’ plans exactly mush in the marketplace, so that the quantity supplied exactly equals the quantity demanded at a given price.

Front 13

Price ceiling-

Back 13

a legal maximum on the price of a good or service

Front 14

Price Floor

Back 14

a legal minimum on the price of a good or service