# Econ ch 3

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1. Demand
The different amounts of a product that a buyer would purchase at different prices in a defined time period when all nonprice factors are held constant.
2. Demand Schedule
A list of the amounts of a product that a buyer would purchase at different prices in a defined time period when all nonprice factors are held constant.
3. Law of Demand
There is an inverse relationship between the price of a product and the quantity demanded.
4. Demand Curve
A line on a graph that illustrates a demand schedule; slopes downward because of the inverse relationship between price and quantity demanded.
5. Supply
The different amounts of a product that a seller would offer for sale at different prices in a defined time period when all nonprice factors are held constant.
6. Supply Schedule
A list of the amounts of a product that a seller would offer for sale at different time period when all nonprice factors are held constant.
7. Law Of Supply
There is a direct relationship between the price of a product and the quantity supplied.
8. Supply Curve
A line on a graph that illustrates a supply schedule; slopes upward because of the direct relationship between price and quantity supplied.
9. Market
A place or situation in which the buyers and sellers of a product interact for the purpose of exchange.
10. Market Demand and Market Supply
The demand of all buyers and supply of all sellers in a market for a good or service; found by adding together all individual demand or supply schedules.
11. Shortage
Occurs in a market when the quantity demanded is greater than the quantity supplied, or when the product's prices is below the equilibrium price.
12. Surplus
Occurs in a market when the quantity demanded is less than the quantity supplied, or when the product's price is above the equilibrium price.
13. Equillibrium Price and Equillibrium Quantity
The price and quantity where demand equals supply; price and quantity toward which a free market automaticall moves.
14. Market Clearing Price
Equillibrium price; price at which the quantity demanded equals the quantity supplied
15. Change in Quantity Demanded and Quantity Supplied
A change in the amount of a product demanded or supplied that is caused by a change in its price; represented by a movement along a demand or supply curve from one price quantity point to another.
16. Change in Demand
A change in the demand schedule and curve for a product caused by a change in a noonprice factor influencing the product's demand; the demand curve shifts to the right or the left.
17. Nonprice Factors Influencing Demand
Nonprice factors, such as income, taste, and expectations, that help to determine the demand for a product.
18. Increase in Demand
A change in a nonprice influence on demand causes more of a product to be demanded at each price; the demand curve shifts to the right.
19. Decrease in Demand
A change in a nonprice influence on demand causes less of a product to be demanded at each price; the demand curve shifts to the left.
20. Change in Supply
A change in the supply schedule and curve for a product caused by a change in a nonprice factor influencing the product's supply; the supply curve shifts to the right or the left.
21. Nonprice Factors Influencing Supply
Nonprice factors, such as the cost of production and the number of sellers in the market, that help to determine the supply of a product.
22. Increase in Supply
A change in a nonprice influence on supply cases more of a product to be supplied at each price; the supply curve shifts to the right.
23. Decrease in Supply
A change in a nonprice influence on supply causes less of a product to be supplied at each price; the supply curve shifts to the left.
24. Price Ceiling (Upper Price Limit)
A government set maximum price that can be chanrged for a good or service; if the equilibrium price is above the price ceiling, a shortage will develop.
25. Usury Laws
State laws setting maxium interest rates that can be charged for certain types of loans.
26. Price floor (lower price limit)
A government set minimum price that can be charged for a good or service; if the equilibrium price is below the price floor, a surplus will develop.
27. Price Elasticity
A measure of the strength of buyers' or sellers' responses to a price change.
28. Price Elastic
A strong respone to a price change; occurs when the percentage change in the quantity demanded or supplied is greater than the percentage change in price.
29. Price Inelastic
A week response to a price change; occurs when the percentage change in the quantity demanded or supplied is less than the percentage change in price.
 Author: julidei ID: 6143 Card Set: Econ ch 3 Updated: 2010-02-06 03:54:12 Tags: Econ Folders: Description: ch 3 Show Answers: