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Demand/Supply/Market
| Question | Answer |
|---|---|
| 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 |
| 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 |
| 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 |
| goods, such as coke and pepsi, that relate in sch a way that an increase in the price of one shifts the demand for the other rightward | substitutes |
| 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 leftward | complements |
| 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 |
| 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 |
| resources used to produce the good in question | relevant resources |
| other goods that use some or all of the same resources as the good in question | alternative goods |
| 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 |
| to have an impact, a _________ ________ must be set above the equilibrium price | price floor |
| to have an impact, a _________ ________ must be set below the equilibrium price | price ceiling |
Created by:
HoneyyBear
on 2012-02-01