22 terms

Micro Chapter 3: Supply and Demand

competitive market
market where there are many buyers and sellers of the same good
supply and demand
model of how a comparative market works
demand schedule
how much of a good or service consumers want to buy at different prices
demand curve
representation of demand schedule
law of demand
higher price for a good that leads people to demand a smaller quantity
shift in demand curve
change in the quantity demanded at any given price
quantity demanded
actual amount of good consumers are willing to buy
rise in price of one items causes rise in price of another item
if a rise in price of one good leads to the decrease in demand of another good
5 principal factors that shift the demand curve
1. change in price of related goods 2. change in income 3. change in tastes 4. change in expectations 5. change in # of consumers
Normal Good
rise in income increases the demand for a good
Inferior good
when rise in income decreases the demand for the good
individual demand curve
shows relationship between quantity demanded and and price for an individual
quantity supplied
actual amount of a good producers are willing to sell at
supply schedule
shows how much of a good producers are willing to supply at different prices
supply curve
relationship between price and quantity supplied
shift in supply curve
change in supply supplied of a good at any time
movement along supply curve
change in quantity supplied of a good that is the result in change of a goods's price
5 factors for supply curve shifts
1. change in input prices 2. change in price of related good 3. change in technology 4. change in expectations 5. change in number of producers
equilibrium price
price that matches quantity supplied and quantity demanded
equilibrium quantity
quantity sold and bought at that price
market-clearing price
equilibrium price