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25 Cards in this Set
- Front
- Back
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What is a market? |
A group of buyers and sellers a particular good or service |
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What is a competitive market? |
A market in which there are many buyers and many sellers so that each has a negligible impact on the market price |
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What does it mean to assume that markets are perfectly competitive? |
The goods offered for sale are all exactly the same and the buyers and sellers are numerous so that no single buyer or seller has influence over the market price |
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What is quantity demanded |
The amount of a good that buyers are willing and able to purchase |
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What is the law of demand |
The claim that, other things being equal, the quantity demanded of a good falls when the price of a good rises |
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What is the demand schedule |
A table that shows the relationship between the price of a good and the quantity demanded |
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What is the market demand |
The sum of all individual demands for a particular good or service |
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A shift of the demand curve to the right is called |
An increase in demand |
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A shift the demand curve to the left is called |
A decrease in demand |
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What is a normal good |
A good for which, other things being equal, an increase in income leads to an increase in demand |
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What is an inferior good |
A good for which an increase in income leads to a decrease in demand |
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What are substitutes |
Two goods for which an increase in the price of one leads to an increase in the demand for the other |
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What are complements goods |
Two goods for which an increase in the price of one leads to a decrease in the demand for the other |
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What is quantity supplied |
The amount of a good that sellers are willing and able to sell |
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What is the law of supply |
The claim that The quantity supplied of a good rises when the price of a good rises |
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What is a supply schedule |
A table that shows the relationship between the price for good and the quantity supplied |
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What is the total quantity supplied |
The sum of the individual quantities |
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What is a supply curve |
A graph of the relationship between the price of a good and the quantity supplied |
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When the supply curve shifts to the right |
There is an increase in supply |
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When the supply curve shifts to the left |
There is a decrease in supply |
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What is equilibrium |
A situation in which the market price has reached the level at which quantity supplied equals quantity demanded |
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What is equilibrium price |
The price of balance is quantity supplied and quantity demanded |
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What is equilibrium quantity what is the law of supply and demand |
The quantity supplied and the quantity demanded at the equilibrium price |
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What is the law of supply and demand |
The claim that the price of any good adjusts to bring the quantity supplied and the quantity demanded for that good into balance |
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What is the difference between supply versus quantity supply |
Supply refers to the position of the supply curve whereas the quantity supplied refers to the amount the suppliers wish to sell |
