a group of economic agents who are trading a good or service, ad the rules and arrangements for trading

the price at which buyers and sellers conduct transactions

perfectly competitive market

All sellers an identical good or service numerous buyers and sellers, no buyer or seller is big enough to influence that market every buyer pays and every seller charges the same market price

amount of a good that buyers are willing to purchase at a given price

a table that reports the quantity demanded at different prices, holding all else equal

plots the quantity demanded at different prices

states the quantity of a good demanded decreases when the price of this good decreases

the maximum price that the buyer is willing to pay for an additional unit of the good

diminishing marginal benefit

as you consume more of a good, your willingness to pay for an additional unit declines

sum of the individual demand curves of all potential buyers plots the aggregate quantity of a good that consumers are willing to buy at different prices, holding all else equal

shift right means increase in willingness of consumers to acquire good shift left means consumers want things less

the amount of a good that sellers are willing to sell at a given price

table that reports the quantity supplied at different prices

plots the quantity supplied at different prices

states the quantity of a good offered increases when the price of this good increases

willingness to accepts

is the lowest price a seller is willing to get paid to sell an extra unit of good.

plots the relationship between the total quantity supplied and the market price, holding all else equal

shifts when factors other than own price change change increase= shift right change decrease= shift left

competitive equilibrium

price that, at this price, the quantities demanded and supplied r the same point which market agrees about what the price will be (competitive equilibrium price) and how much will be exchanged at that price (competitive equilibrium quantity)

occurs when consumers want more than suppliers provide at a given price. Situation results in a shortage.

occurs when suppliers provide more than consumers want a given price. This situation results in a surplus

process of adding up the individual demand curves to find the market demand consists of fixing the price of the good and adding up the quantity demanded by each buyer

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econ chapter 4

Question	Answer
market	a group of economic agents who are trading a good or service, ad the rules and arrangements for trading
market price	the price at which buyers and sellers conduct transactions
perfectly competitive market	All sellers an identical good or service numerous buyers and sellers, no buyer or seller is big enough to influence that market every buyer pays and every seller charges the same market price
quantity demanded	amount of a good that buyers are willing to purchase at a given price
demand schedule	a table that reports the quantity demanded at different prices, holding all else equal
demand curve	plots the quantity demanded at different prices
law of demand	states the quantity of a good demanded decreases when the price of this good decreases
willingness to pay	the maximum price that the buyer is willing to pay for an additional unit of the good
diminishing marginal benefit	as you consume more of a good, your willingness to pay for an additional unit declines
market demand curve	sum of the individual demand curves of all potential buyers plots the aggregate quantity of a good that consumers are willing to buy at different prices, holding all else equal
demand curve shift	shift right means increase in willingness of consumers to acquire good shift left means consumers want things less
quantity supplied	the amount of a good that sellers are willing to sell at a given price
supply schedule	table that reports the quantity supplied at different prices
supply curve	plots the quantity supplied at different prices
law of supply	states the quantity of a good offered increases when the price of this good increases
willingness to accepts	is the lowest price a seller is willing to get paid to sell an extra unit of good.
market supply curve	plots the relationship between the total quantity supplied and the market price, holding all else equal
supply curve change	shifts when factors other than own price change change increase= shift right change decrease= shift left
competitive equilibrium	price that, at this price, the quantities demanded and supplied r the same point which market agrees about what the price will be (competitive equilibrium price) and how much will be exchanged at that price (competitive equilibrium quantity)
excess demand	occurs when consumers want more than suppliers provide at a given price. Situation results in a shortage.
excess supply	occurs when suppliers provide more than consumers want a given price. This situation results in a surplus
aggregation	process of adding up the individual demand curves to find the market demand consists of fixing the price of the good and adding up the quantity demanded by each buyer

Created by: user-1742075

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