Economics Chapter 3

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riana143
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238049
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Economics Chapter 3
Updated:
2013-10-01 02:10:26
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Econ
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vocab
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  1. any institution or mechanism that brings together buyers (demanders) and sellers (suppliers) of a particular good or service
    market
  2. a schedule showing the amounts of a good or service that buyers (or a buyer) wish to purchase at various prices during some time period
    demand
  3. table that shows the quantities of a product that will be purchase at various possible prices, other things equal
    demand schedule
  4. the principle that, other things equal, an increase in a product's price will reduce the quantity of it demanded, and conversely for a decrease in price
    law of demand
  5. In any specific time period, each buyer of a product will derive less satisfaction (or benefit or utility) from each successive unit of the product consumed
    diminishing marginal utility
  6. a change in the quantity demanded of a product that results from the change in real income (purchasing power) produced by a changed in the product's price
    income effect
  7. (1) a change in the quantity demanded of a consumer good that results from a change in its relative expensiveness produced y a change in the product's prices; (2) the effect of a change in the price of a resource on the quantity of the resource employed by a firm, assuming no change in its output
    substitution effect
  8. a curve illustrating demand
    demand curve
  9. factors other than price that determine the quantities demanded of a good or service
    determinants of demand
  10. a good or service whose consumption increases when income increases and falls when income decreases, price remaining constant
    normal goods
  11. a good or service whose consumption declines as income rises (and conversely), price remaining constant
    inferior goods
  12. products or services that can be used in place of each other. When the price of one falls, the demand for the other product falls; conversely, when the price of one product rises, the demand for the other product rises
    substitute goods
  13. products and services that are used together. When the price of one falls, the demand for the other increase (and conversely)
    complementary goods
  14. a change in the quantity demanded of a good or service at every price; a shift of the supply curve to the left or right
    change in demand
  15. a movement from one point to another point--from one price quantity combination to another--on a fixed demand schedule or demand curve
    change in quantity demanded
  16. a schedule showing the amounts of a good or service that sellers (or a seller) will offer at various prices during some period
    supply
  17. tells us that firms will produce and offer for sale more of their product at a high price than at a low price
    supply schedule
  18. the principle that, other things equal, an increase in the price of a product will increase the quantity of it supplied, and conversely for a price decreases
    law of supply
  19. a curve illustrating supply
    supply curve
  20. factors other than price that determine the quantities supplied of a good or service
    determinants of supply
  21. a change in the quantity supplied of a good or service at every price; shift of the supply curve to the left or right
    change in supply
  22. movement from one point to another on a fixed supply curve
    change in quantity supplied
  23. the amount by which the quantity supplied of a product exceeds the quantity demanded at a specific (above equilibrium) price
    surplus
  24. the amount by which the quantity demanded of a product exceeds the quantity supplied at a particular (below-equilibrium) price
    shortage
  25. the price in a competitive market at which the quantity demanded and the quantity supplied are equal, there is neither a shortage nor a surplus, and there is no tendency for price to rise or fall
    equilibrium price
  26. (1) the quantity demanded and supplied at the equilibrium price in a competitive market; (2) the profit-maximizing output of a firm
    equilibrium quantitity
  27. the ability of market forces in competitive markets to equalize quantity demanded and quantity supplied and to eliminate shortages and surpluses via changes in prices
    rationing function of prices

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