1.
Ceteris paribus ("all else equal"): the requirement that when analyzing the relationship between two variables - such as price and quantity demanded - other variables must be held constant
2.
competitive market equilibrium: a market equilibrium with many buyers and many sellers
3.
complements: goods and services that are used together.
4.
demand curve: a curve that shows the relationship between the price of a product and the quantity of the product demanded.
5.
Demand schedule: A table showing the relationship between the price of a product and the quantity of the product demanded
6.
demographics: the characteristics of a population with respect to age, race, and gender.
7.
income effect: the change in the quantity demanded of a good that results from the effect of a change in the good's price on consumers' purchasing power.
8.
inferior good: a good for which the demand increases as income falls and decreases as income rises.
9.
law of demand: the rule that, holding everything else constant, when the price of a product falls, the quantity demanded of the product will increase, and when the price of the product rises, the quantity demaded of the product will decrease
10.
law of supply: The rule that, holding everything else constant, increases in price causes increases in the quantity supplied, and decreases in price cause decreases in the quantity supplied.
11.
market demand: the demand by all the consumers of a given good or service.
12.
market equilibrium: a situation in which quantity demanded equals quantity supplied
13.
Normal good: A good for which the demand increases as income rises and decreases as income falls.
14.
Perfectly competitive market: A market that meets the conditions of (1) many buyers and sellers, (2) all firms selling identical products, and (3) no barriers to new firms entering the market.
15.
Quantity demanded: the amount of a good or service that a consumer is willing and able to purchase at a given price
16.
quantity supplied: the amount of a good or service that a firm is willing and able to supply at a given price
17.
shortage: a situation in which the quantity demanded is greater than the quantity supplied
18.
substitutes: goods and services that can be used for the same purpose.
19.
substitution effect: the change in the quantity demanded of a good that results from a change in price, making the good more or less expensive relative to the other goods that are substitutes
20.
supply curve: a curve that shows the relationship between the price of a product and the quantity of the product supplied.
21.
supply schedule: A table that shows the relationship between the price of a product and the quantity of the product supplied
22.
surplus: a situation in which quantity supplied is greater than the quantity demanded
23.
technological change: a positive or negative change in the ability of a firm to produce a given level of output with a give quality or inputs.