Economics 1500

 The flashcards below were created by user Anonymous on FreezingBlue Flashcards. Law of Demand Quantity demanded rises as price falls, other things constant. Quantity demanded falls as price rises, other things constant. Demand Curve the graphic representation of the relationship between price and quantity demanded (price and demand are inversely related) Demand refers to a schedule of quantities of a good that will be bought per unit of time at various prices, other things constant (the entire curve) Quantity Demanded refers to a specific amount that will be demanded per unit of time at a specific price, other things constant (a single point on the curve) movement along a demand curve the graphical representation of the effect of a change in price on the quantity demanded shift in demand the graphical representation of the effect of anything other than price on demand Shift factors of demand 1.) Society's income2.) The prices of other goods3.) Tastes4.) Expectations5.) Taxes on and subsidies to consumers market demand curve the horizontal sum of all individual demand curvesaka total demand curve For market, the law of demand is based on two phenomena: 1.) At lower prices, existing demanders buy more2.) At lower prices, new demanders (some all-or-nothing) enter the market Law of supply states Quantity supplied rises as price rises, other things constant. Quantity supplied falls as price falls, other things constant. Supply Curve the graphical representation of the relationship between price and quantity supplied Supply a schedule of quantities a seller is willing to sell per unit of time at various prices, other things constant Quantity supplied a specific amount that will be supplied at a specific price Movement along a supply curve the graphical representation of the effect of a change in price on the quantity supplied Shift in supply the graphical represenation of the effect of a change in a factor other than price on supply Shift factors of supply 1.) Price of inputs2.) Technology3.) Expecations4.) Taxes and Subsidies Market supply curve the horizontal sum of all individual supply curves equilibrium a concept in whcih opposing dynamic forces cancel each other out Equilibrium Quantity amount bought and sold at equilibrium price Equilibrium price the price toward which the invisible hand drives the market Excess supply (a surplus) quantity supplied is greater than quantity demanded Excess Demand (a shortage) quantity demanded is greater than quantity supplied fallacy of compositiion the false assumption that what is true for a part will also be true for the whole AuthorAnonymous ID21858 Card SetEconomics 1500 DescriptionSupply and Demand Updated2010-06-03T04:00:54Z Show Answers