Microeconomics Chapter 3

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Author:
Drizzle
ID:
282607
Filename:
Microeconomics Chapter 3
Updated:
2014-09-10 03:31:45
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Microeconomics Econ Micro
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Chapter 3
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  1. Ceteris paribus condition ("All else equal")
    The requirement when analyzing the relationship between two variables such as price and quantity demanded- other variables must be held constant.
  2. Competitive market equilibrium
    A market equilibrium with many buyers and sellers.
  3. Demand curve
    A curve that shows the relationship between the price of a product and the quantity of the product demanded.
  4. Demand schedule
    A table that shows the relationship between the price of a product and the quantity of the product demanded.
  5. Income effect
    The change in the quantity demanded of a good that results from the effect of a change in the good's price on consumers' purchasing power, holding all other factors constant.
  6. Law of supply
    The rule that, holding everything else constant, increases in price cause increases int he quantity supplied, and decreases in price cause decreases in the quantity supplied.
  7. Market equilibrium
    A situation in which quantity demanded equals quantity supplied.
  8. Perfectly competitive market
    A market that meets the conditions of (1) many buyers and sellers, (2) all firms selling identical products, and (3) no barriers to new firms entering the market.
  9. Quantity demanded
    The amount of a good or service that consumers are willing and able to purchase at a given price.
  10. Quantity supplied
    The amount of a good or service that a firm is willing and able to supply at a given price.
  11. Supply curve
    A curve that shows the relationship between the price of a product and the quantity of the product supplied.

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