Econ- Exam I- Chapter 3

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  1. perfectly competitive market:
    • meets the conditions:
    • 1.) many buyers and sellers
    • 2.) all firms selling identical products
    • 3.) no barriers to new firms entering the market
  2. demand schedule:
    shows the relationship between price of a product and the quantity of the product demaded
  3. quantity demanded:
    amt of a G or S that a consumer is willing and able to purchase at a given price
  4. demand curve:
    shows the relationship between the price of a product and the quantity of the product demanded
  5. market demand:
    demand by all the consumers of a given G or S
  6. law of demand:
    holding everything constant, when the price of a product falls the quantity demanded of the product will increase
  7. substitution effect:
    change in quantity demanded of a G that results from a change in price
  8. income effect:
    change in quantity demanded of a G that results from the effect of a change in the good's price on consumers' purchasing power
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Econ- Exam I- Chapter 3
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macro
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