UTK: Economics 201 - Chapter 4

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volfan13
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35076
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UTK: Economics 201 - Chapter 4
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2010-09-16 00:14:40
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Economics University Tennessee Econ
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Key Terms for Econ201 - Chapter 4
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  1. Definition: A relation between the price of a good and the quantity that consumers are willing and able to buy per period, other things constant.
    Demand
  2. Definition: The quantity of a good that consumers are willing and able to buy per period relates inversely, or negatively, to the price, other things constant.
    Law of Demand
  3. Definition: When the price of a good falls, that good becomes cheaper compared to other goods so consumers tend to substitute that good for other goods.
    Substitution Effect of a Price Change
  4. Definition: The number of dollars a person receives per period, such as $400 per week.
    Money Income
  5. Definition: Income measured in terms of the goods and services it can buy; real income changes when the price changes.
    Real Income
  6. Definition: A fall in the price of a good increases consumers' real income; making consumers more able to purchase goods; for a normal good, the quantity demanded increases.
    Income Effect of a Price Change
  7. Definition: A curve showing the relation between the price of a good and the quantity consumers are willing and able to buy per period, other things constant.
    Demand Curve
  8. Definition: The amount of a good consumers are willing and able to buy per period at a particular price, as reflected by a point on a demand curve.
    Quantity Demanded
  9. Definition: A relation between the price of a good and the quantity purchased by an individual consumer per period, other things constant.
    Individual Demand
  10. Definition: The relation between the price of a good and the quantity purchased by all consumers in the market during a given period, other things constant; sum of the individual demands in the market.
    Market Demand
  11. Definition: A good, such as new clothes, for which demand increases, or shifts rightward, as consumer income rises.
    Normal Good
  12. Definition: A good , such as used clothes, for which demand decreases, or shifts leftward, as consumer income rises.
    Inferior Good
  13. Definition: Goods, such as Coke and Pepsi, that relate in such a way that an increase in the price of one shifts the demand for the other rightward.
    Substitutes
  14. Definition: Goods, such as milk and cookies, that relate in such a way that an increase in the price of one shifts the demand for the other.
    Complements
  15. Definition: Consumer preferences; likes and dislikes in consumption assumed to remain constant along a given demand curve.
    Tastes
  16. Definition: Change in quantity demanded resulting from a change in the price of the good, other things constant.
    Movement Along a Demand Curve
  17. Definition: Movement of a demand curve right or left resulting from a change in one of the determinants of demand other than the price of the good.
    Shift of a Demand Curve
  18. Definition: A relation between the price of a good and the quantity that producers are willing and able to sell per period, other things constant.
    Supply
  19. Definition: The amount of a good that producers are willing and able to sell per period is usually directly related to its price, other things constant.
    Law of Supply
  20. Definition: A curve showing the relation between price of a good and the quantity producers are willing and able to sell per period, other things constant.
    Supply Curve
  21. Definition: The amount offered for sale per period at a particular price, as reflected by a point on a given supply curve.
    Quantity Supplied
  22. Definition: The relation between the price of a good and the quantity an individual producer is willing and able to sell per period, other things constant.
    Individual Supply
  23. Definition: The relation between the price of a good and the quantity all producers are willing and able to sell per period, other things constant.
    Market Supply
  24. Definition: Resources used to produce the good in question.
    Relevant Resources
  25. Definition: Other goods that use some or all of the same resources as the good in question.
    Alternative Goods
  26. Definition: Change in quantity supplied resulting from a change in the price of the good, other things constant.
    Movement Along a Supply Curve
  27. Definition: Movement of a supply curve left or right resulting from a change in one of the determinants of supply other than the price of the good.
    Shift of a Supply Curve
  28. Definition: The costs of time and information required to carry out market exchange.
    Transaction Costs
  29. Definition: At a given price, the amount by which quantity supplied exceeds quantity demanded; usually forces the price down.
    Surplus
  30. Definition: At a given price, the amount by which quantity demanded exceeds quantity supplied; usually forces the price up.
    Shortage
  31. Definition: The condition that exists in a market when the plans of buyers match those of sellers, so quantity demanded equals quantity supplied and the market clears.
    Equilibrium
  32. Definition: The condition that exists in a market when the plans of buyers do not match those of sellers; a temporary mismatch between quantity supplied and quantity demanded as the market seeks equilibrium.
    Disequilibrium
  33. Definition: A minimum legal price below which a product cannot be sold; to have an impact, must be set above the equilibrium price.
    Price Floor
  34. Definition: A maximum legal price above which a product cannot be sold; to have an impact, must be set below the equilibrium price.
    Price Ceiling

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