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ECON0MICS
Mankiw, Principles of Economics, Ch4
Question | Answer |
---|---|
competitive market | a market in which there are many buyers and many sellers so that each has a negligible impact on the market price |
complements | two goods for which an increase in the price of one leads to a decrease in the demand for the other |
demand curve | a graph of the relationship between the price of a good and the quantity demanded |
demand schedule | a table that shows the relationship between the price of a good and the quantity demanded |
equilibrium | a situation in which the market price has reached the level at which quantity supplied equals quantity demanded |
equilibrium price | the price that balances quantity supplied and quantity demanded |
equilibrium quantity | the quantity supplied and the quantity demanded at the equilibrium price |
inferior good | a good for which, other things equal, an increase in income leads to a decrease in demand |
law of demand | the claim that, other things equal, the quantity demanded of a good falls when the price of the good rises |
law of supply | the claim that, other things equal, the quantity supplied of a good rises when the price of the good rises |
law of supply and demand | the claim that the price of any good adjusts to bring the quantity supplied and the quantity demanded for that good into balance |
market | a group of buyers and sellers of a particular good or service |
normal good | a good for which, other things equal, an increase in income leads to an increase in demand |
quantity demanded | the amount of a good that buyers are willing and able to purchase |
quantity supplied | the amount of a good that sellers are willing and able to sell |
shortage | a situation in which quantity demanded is greater than quantity supplied |
substitutes | two goods for which an increase in the price of one leads to an increase in the demand for the other |
supply curve | a graph of the relationship between the price of a good and the quantity supplied |
supply schedule | a table that shows the relationship between the price of a good and the quantity supplied |
surplus | a situation in which quantity supplied is greater than quantity demanded |