Economics 3rd ed
What is a perfectly competitive market?
There are many buyers and sellers, all the products sold are identical, and there are no barriers to new sellers in the market.
What is quanity demanded?
The amount of good or service that a customer is willing and able to purchase at a given price.
What is a demand schedule?
A table that shows the relationship between the price of a product and the quantity of the product demanded.
What is the demand curve?
A graph that shows the relationship between the price of the good and the quantity of the good demanded.
What is Market Demand?
The demand by all consumers on a given good or service.
What is the Law of Demand?
It states that when the quantity of the product demanded increases when the price falls and decreases when the price rises.
Holding everything else constant.
What is the substitution effect?
A change in quantity demanded that results from a price change making one good more or less expensive relitive to another good
What is the income effect?
A change in the quantity demanded of a good that results from the effect of a change in good's price on customer purchasing power.
What are Substitutes?
Goods that can be used for the same purpose.
What are compliments?
Goods that are used together.
What is a Normal Good?
A good for which demand increases as income increases.
What is Inferior Good?
A good for which demand decreases as income increases.
What is a Demographic?
Characteristics of a population with respect to age, race, and gender.
What is a change in demand?
A shift in the demand curve.
What is a change in quantity demanded?
A movement along the demand curve.
What is Quantity Supplied?
The amount of a good that a firm is willing and able to supply at a given price.
What is a Supply Schedule?
A table that shows the relationship between the price of the product and the quantity of the product supplied.
What is the supply curve?
A graph that shows the relationship between the price of a product and the quantity of the product supplied.
What is the Law of Supply?
The quantity of a product supplied increases when the price rises and decreases when the price falls.
What is a Technological change?
A positive or negative change in the ability of a firm to produce a given level of output with a given quantity of inputs.
What is Market Equilibrium?
Occurs when the demand curve intersects with the supply curve.
What is a competitive market equilibrium?
A market equilibrium with many buyers and many sellers.
What is a surplus?
The result of prices being above equilibrium.
What is a shortage?
The result of prices being below equilibrium.
Economics 3rd ed
Unit test Ch 1-3