Ch.4 Flashcards
(18 cards)
Economics 12
Chapter 4 Vocabulary
ceteris paribus
Latin for “other things being equal” or “as long as other things do not change;” an assumption made when economists want to understand the cause-and-effect relationship between any two factors and want other factors affecting that relationship to be held constant.
complement goods
Goods that are sold together along with other goods, e.g., gasoline and automobiles.
consumer expectations
What consumers believe will happen to the price of a product in the future; such beliefs have the effect of changing consumer demand for the product in the present.
demand
The quantity of a good or service that buyers will purchase at various prices during a given period of time.
demand curve
A straight line or curve on a graph illustrating the demand schedule for a product.
demand schedule
A table showing the quantities demanded of a product at particular prices.
demographics
Population statistics that show changes in age, income, and overall numbers, often used by businesses in their planning.
equilibrium price
A price set by the interaction of demand and supply in which the absence of surpluses or shortages in the market means there is no tendency for the price to change.
law of demand
A law stating that the quantity demanded of a product varies inversely with its price, as long as other things do not change.
law of supply
A law stating that the quantity supplied of a product will increase if price increases and fall if price falls, as long as other things do not change.
market
A place for commerce; a network of buyers or sellers. Also, the demand for a product; a price-determination process.
market demand schedule
The sum total of all the consumer demands for a good or service.
non-price factor
A factor held constant in the relationship between price and quantity demanded and supplied.
perfect (or pure) competition
A rare market structure characterized by many sellers (selling exactly the same product) and many buyers, no barriers to entry into the market for new firms, and perfect knowledge of prices (so there are no price differences and no individual can influence them).
substitute goods
Goods that are similar to other goods and serve as an alternative if the price of the latter goods rises.
supply
The quantities that sellers will offer for sale at various prices during a given period of time.
supply schedule
A table showing the quantities of a product supplied at particular prices.
