Macro Economics Chapter 03 Key Words Flashcards Preview

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Flashcards in Macro Economics Chapter 03 Key Words Deck (20):
2

change in demand

An increase or a decrease in the quantity demanded at each possible price. An increase in demand is a rightward shift in the entire demand curve. A decrease in demand is a leftward shift in the entire demand curve.

3

change in quantity demanded

A movement between points along a stationary demand curve, ceteris paribus.

4

change in quantity supplied

A movement between points along a stationary supply curve, ceteris paribus.

5

change in supply

An increase or a decrease in the quantity supplied at each possible price. An increase in supply is a rightward shift in the entire supply curve. A decrease in supply is a leftward shift in the entire supply curve.

6

complementary good

A good that is jointly consumed with another good. As a result, there is an inverse relationship between a price change for one good and the demand for its “go together” good.

7

consumer surplus

The value of the difference between the price consumers are willing to pay for a product on the demand curve and the price actually paid for it.

8

deadweight loss

The net loss of consumer and producer surplus for underproduction or overproduction of a product.

9

demand

A curve or schedule showing the various quantities of a product consumers are willing to purchase at possible prices during a specified period of time, ceteris paribus.

10

equilibrium

A market condition that occurs at any price and quantity where the quantity demanded and the quantity supplied are equal.

11

inferior good

Any good for which there is an inverse relationship between changes in income and its demand curve.

12

law of demand

The principle that there is an inverse relationship between the price of a good and the quantity buyers are willing to purchase in a defined time period, ceteris paribus.

13

law of supply

The principle that there is a direct relationship between the price of a good and the quantity sellers are willing to offer for sale in a defined time period, ceteris paribus.

14

market

Any arrangement in which buyers and sellers interact to determine the price and quantity of goods and services exchanged.

15

normal good

Any good for which there is a direct relationship between changes in income and its demand curve.

16

price system

A mechanism that uses the forces of supply and demand to create an equilibrium through rising and falling prices.

17

producer surplus

The value of the difference between the actual selling price of a product and the price producers are willing to sell it for on the supply curve.

18

shortage

A market condition existing at any price where the quantity supplied is less than the quantity demanded.

19

substitute good

A good that competes with another good for consumer purchases. As a result, there is a direct relationship between a price change for one good and the demand for its “competitor” good.

20

supply

A curve or schedule showing the various quantities of a product sellers are willing to produce and offer for sale at possible prices during a specified period of time, ceteris paribus.

21

surplus

A market condition existing at any price where the quantity supplied is greater than the quantity demanded.

Decks in Macro Economics 103 Class (47):