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empirical investigation
the observation are empirical, theoritical, and historical
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time series data
observation and recording of the specific phenomena of concern
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theoretical investigation
analysis based in absract thought
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historical investigation
study of past events
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supply curve
a curve indicating the quantities that sellers are willing to suply at various prices
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positive of direct relationship
the relationship between two variable when an increase in one is associated with an increase in the order
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market supply
supply from all sellers in the market
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individual supply
supply from one individual seller
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change in quantity supplied
movement along a supply curve in response to a price change
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ceteris parabis
a latin phase meaning "other things equal" or "all else constant"
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change in supply
a shift of the supply curve in responsr to some determinant other than price
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nonprice determinants of supply
everuthing affecting the quantity supplied, exempt the price for which the product can be sold
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demand curve
a curve indicating the quantities that buyers are ready to purchase at various prices
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effective demand
the desire for a product that can be translated into purchasing behavior because it is backed up by enough money to pay the going price
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negative or inverse relationship
the relationship between variables if an increase in one is associated with a decrease in the other
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market demand
the demand from all buyers in the market
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individual demand
the demand from one individual buyer
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change in quantity demanded
movement along a demand curve in response to a price change
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change in demand
a shift of the demand curve in response to some determinant other than price
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derived demands
demand for an input that is based on demand for the output it will help to procedure
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nonprice determinants of demands
everything affecting the quantity for which there is effective demand, except the price for which the product is being sold
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substitute good
a good that can be used in place of another good
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complementary good
a good that is used along with another good
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surplus
situation in which the quantity that sellers wish to sell at the stated price is greater than the quantity that buyers will buy at that price
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shortage
a situation in which the quantity that buyers wish to buy at the stated price is greater than quanitity that sellers are willing to sell at that price
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equilibrium
a situation of rest, in which there are no forces that create cahnge
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market clearing equilibrium
situation in which the quantity supplied is equal to the quantity demanded
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theory of market adjustment
the theory that market forces will tend to make shortages and surpluses disappear
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market disequilibrium
situation of either shortage or surplus
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static model
a model that ignores time, implicitly assuming that all adjustments occur instantaneously
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signaling function of markets and prices
to carry information throughout the ecnomy
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rationing function of markets and prices
to determine who gets what
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market incentives
market signals that motiveate economic actors to change their behavior(perhaps in the direction of greater economic efficiency)
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inadequency
a situation in which there is not enough of a good or service, provided at prices people can afford, to meet minimal requirements for human well-being
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precise
describes something that is exact (though it may be unrealistic)
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accurate
describe something that is correct (even if only in a general way)
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price floor
a law or agreement that puts a lower limit on prices
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price ceiling
a law or agreement that puts an upper limit on prices
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cartel
a group of procedures who mutually agree to limit their production in order to sustain a price floor
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