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Economics Ch3
| Question | Answer |
|---|---|
| Demand | A schedule or curve that shows the various amounts of a product that consumers will buy at each of a series of possible prices during a specific period. |
| Law of demand | The principle that, all else equal, as price falls, the quantity demanded rises, and as price rises, the quantity demanded falls. |
| Demand curve | A curve illustrating the inverse relationship between the price of a product and the quantity of it demanded, other things equal. |
| Determinants of demand | Factors other than price that locate the position of a demand cure. |
| Normal good | A good (or service) whose consumption rises when income increases and falls when income decreases. |
| Inferior good | A good (or service) whose consumption declines as income rises and rises as income decreases. |
| Substitute good | A good (or service) that can be used in place of some other good (or service). |
| Complementary good | A good (or service) that is used in conjunction with some other good (or service). |
| Change in demand | A change in the quantity demanded of a product at every price. |
| Change in quantity demanded | A movement from one point to another on a demand curve. |
| Supply | A schedule or curve that shows the amounts of a product that producers are willing to make available for sale at each of a series of possible prices during a specific period. |
| Law of supply | 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 decrease. |
| Supply curve | Curve illustrating the direct relationship between the quantity supplied of a product and its price, other things equal. |
| Determinants of supply | Factors other than the price that determine the quantities supplied of products. |
| Change in supply | A change in the quantity supplied of a product at every price; a shift of the supply curve to the left or right. |
| Change in quantity supplied | A movement from one point to another on a fixed supply curve. |
| Equilibrium price | A price in a competitive market at which the quantity demanded and quantity supplied of a product are equal. |
| Equilibrium quantity | The quantity demanded and quantity supplied that occur at the equilibrium price in a competitive market. |
| Surplus | The amount by which the quantity supplied of a product exceeds the quantity demanded at a specific (above equilibrium) price. |
| Shortage | The amount by which the quantity demanded of a product exceeds the quantity supplied at a specific (below equilibrium) price. |
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