ECON Chapter 3 Notes.txt

Any place where factors of production are bought and sold

Any place where finished goods and services are bought and sold.

• Services
• Purchasing factors of production

The direct exchange of one good for another without the use of money

The ability and willingness to sell specific quantities of a good at alternative prices in a given time period, ceteris paribus.

The ability and willingness to buy specific quantities of a good at alternative prices in a given time period.

The most desired goods or services that are forgone in order to obtain something else.

A table showing the quantities of a good a consumer is willing and able to buy at alternative prices in a given time period.

A curve describing the quantities of a good a consumer is willing and able to buy at alternative prices in a given time period.

The quantity of a good demanded in a given time period increases as its price falls.

The assumption of nothing else changing

A change in the quantity demanded at any given price.

Market demand is determined by the number of potential buyers and their respective tastes, income, other goods, and expectations.

The total quantities of a good or service people are willing and able to buy at alternative prices in a given time period. The sum of individual demands.

The total quantities of a good that sellers are willing and able to sell at alternative prices in a given time period.

The quantity of a good supplied in a given time period increases as its price increases.

The price at which the quantity of a good demanded in a given time period equals the quantity supplied.

The amount by which the quantity demanded exceeds the quantity supplied at a given price: excess demand.

The amount by which the quantity supplied exceeds the quantity demanded at a given price: excess supply.

Upper limits imposed on the price of a good or service.

Lower limit imposed on the price of a good.

The doctrine of �leave it alone� of nonintervention by government in the market mechanism.

The use of market prices and sales to signal desired outputs.