Econ Chapter 4

  1. Market
    a group of buyers or sellers of a particular good or service
  2. Competitive Market
    • large number of sellers and large number of buyers
    • selling identical goods
    • free entry and exit 

    ie milk and other agricultural commodities
  3. Quantity Demanded
    amount of the product that the buyer is WILLING and ABLE to buy at the market price
  4. Law of Demand
    If other things being equal, then there is a negative relationship b/t PRICE of the product and the QUANTITY of the product 

    • price + quantity -
    • price - quantity +
  5. Market Supply
    sum of two individual supplies
  6. Law of Supply
    If other things being equal, then there is a positive relationship between the price of the product and the quantity supplied of the product

    • price + quantity + 
    • price - quantity -
  7. Market equilibrium
    point where supply and demand intersect

    equilibrium price on y equilibrium quantity on x
  8. surplus
    anything above on that graph (hit demand before supply curve)
  9. shortage
    anything below on that graph, hit supply before hit demand
Card Set
Econ Chapter 4
Econ Chapter 4