Chapter 3 Terms

Question 1

Quantity demanded

Answer 1

The amount of good or service that consumers want to purchase during some time period (desired not necessarily received)

*flow variable- so much per period of time

Question 2

Difference between stock & Flow

Answer 2

Flow variable has a time dimension : so much per unit of time. Ie 2000 eggs per month

Stock variable is a variable whose value has meaning at a point in time. Ie 2000 eggs in a warehouse on Sept 3, 2024.

Question 3

Demand schedule

Answer 3

A table showing the relationship between quantity demanded and the price of a product, other things being equal

Question 4

Demand curve

Answer 4

Shows the quantity that consumers would like to buy at each price

The graphical representation of the relationship between quantity demanded and the price of a product, other things being equal

Question 5

Demand

Answer 5

The entire relationship between the quantity demanded and the price - the entire curve essentially

Question 6

Quantity supplied

Answer 6

The amount of good or service that producers want to sell during some time period

Question 7

Market

Answer 7

Any situation in which buyers & sellers can negotiate the exchange of goods or services

Question 8

Equilibrium price

Answer 8

The intersection where quantity supplied equals quantity demanded

(Also called market clearing price)

Question 9

Excess demand

Answer 9

At the given price, quantity demanded exceeds quantity supplied

Question 10

Excess supply

Answer 10

At the given price quantity supplied exceeds quantity demanded

Question 11

Disequilibrium / disequilibrium price

Answer 11

Excess demand or excess supply / quantity demanded ≠ quantity supplied

Question 12

Comparitive statics

Answer 12

The derivation of predictions by analyzing the effect of a change in a single exogenous variable on the equilibrium