Chapter 3 Flashcards
(24 cards)
A market in which there are many buyers and sellers of the same good or service, none of whom can influence the price at which the good or service is sold.
Competitive market
pairs of goods for which a rise in the price of one good leads to a decrease in the demand for the other good.
Complements
A list or table showing how much of a good or service consumers will want to buy at different prices.
Demand Schedule
A graphical representation of the demand schedule, showing the relationship between quantity demanded and price.
Demand curve
The price at which the market is in equilibrium, that is, the quantity of a good or service demanded equals the quantity of that good or service supplied.
Equilibrium price (market clearing price)
The quantity of a good or service bought and sold at the equilibrium price.
Equilibrium quantity
A good for which a rise in income decreases the demand for the good.
Inferior good
A good or service used to produce another good or service.
Input
A graphical representation of the relationship between quantity demanded and price for an individual consumer.
Individual demand curve
A graphical representation of the relationship between quantity supplied and price for an individual consumer.
Individual supply curve
The principle that a higher price for a good or service, other things equal, leads people to demand a smaller quantity of that good or service.
Law of demand
a change in the quantity supplied of a good that results from a change in the price of the good.
Movement along the supply curve
A change in the quantity demanded of a good that results from a change in the price of tat good.
Movement along the demand curve
A good for which a rise in income increases the demand for that good.
Normal good
The actual amount of a good or service producers are willing to sell at some specific price.
Quantity supplied
A change in the quantity demanded at any given price, represented graphically by the change of the original demand curve to a new position, denoted by a new demand curve
Shift of the demand curve
A change in the quantity supplied of a good or service at any given price, represented graphically by the change of the original supply curve to a new position, denoted by a new supply curve.
Shift of the supply curve
The insufficiency of a good or service that occurs when the quantity demanded exceeds the quantity supplied. Occurs when the price is below the equilibrium price.
Shortage
The excess of a good or service that occurs when the quantity supplied exceeds the quantity demanded. Occurs when the price is above he equilibrium price.
Surplus
Pairs of goods for which a rise in the price of one of the goods leads to an increase in the demand for the other good.
Substitute
A model of how a competitive market works.
Supply and demand model
A list or table showing how much of a good or service producers will supply at different prices.
Supply schedule
A graphical representation of the supply schedule, showing the relationship between quantity supplied and price.
Supply curve
The actual amount of a good or service consumers are willing to buy at some specific price.
Quantity demanded
