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modules 5, 6, & 7
Term | Definition |
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quantity demanded | actual amount of a good or service consumers are willing and able to buy at some price level |
law of demand | higher price of a good or service leads people to demand a smaller quantity of that good |
change in demand | shift of the demand curve |
movement along the demand curve | change in the QUANTITY DEMANDED of a good that is the result of a change in that good's price |
substitutes | Pairs of goods for which a rise in price of one of the goods leads to an increase in demand for the other good |
complements | pairs of goods for which a rise in price of one good leads to a decrease in the demand for the other good |
inferior good | a good for which a rise in income decreases the demand for the good |
normal good | a good for which a rise in income increases the demand for that good |
quantity supplied | the actual amount of a good or service producers are willing to sell at some specific price |
law of supply | other things being equal, the price and quantity supplied of a good are positively related |
change in supply | a shift of the supply curve which changes the quantity supplied at any given point |
movement along the supply curve | a change in the QUANTITY SUPPLIED of a good that results from a change in the price of that good |
input | a good or service used to produce another good or service |
equlibrium | an economic situation in which no individual would be better off doing something different |
surplus | excess of a good or service that occurs when the quantity supplied exceeds the quantity demanded; occurs when the price is ABOVE the equilibrium price |
shortage | insufficiency of a good or service that occurs when the quantity demanded exceeds the quantity supplied; occurs when the price is BELOW the equilibrium price |