22 terms

Econ Unit 2 - Supply and Demand

The amount of goods available
The desire, willingness, and ability to buy a good or service
Law of Supply
As the price increases producers produce more
Law of Demand
consumers buy more of a good when its price decreases and less when its price increases
demand schedule
A table that lists the quantity of a good a person will buy at each different price
supply schedule
a table that shows the relationship between the price of a good and the quantity supplied
The point at which quantity demanded and quantity supplied are equal; the point where the supply and demand curves meet
equilibrium price
The price at which the amount of goods producers supply meets the amount of goods consumers demand.
equilibrium quantity
the quantity supplied and the quantity demanded at the equilibrium price
demand elasticity
the extent to which a change in price causes a change in the quantity demanded
inelastic demand
changes in price do not affect demand
example of inelastic demand
Milk, bread, eggs, medicine, gasoline . (we continue to buy the same amount regardless the price)
elastic supply
a measure of how the quantity supplied of a good or service changes in response to changes in price
inelastic supply
Quantity supplied changes little when price changes
example of inelastic supply
gasoline, fresh water
price effect
The impact that a change in value has on the consumer demand for a product or service in the market.
substitute good
Two or more goods that satisfy a similar need, so that one good can be used instead of the other. If two goods are substitutes, an increase in the price of one leads to an increase in the demand for the other.
complementary good
a product often used with another product
something that is fashionable
an outcome or event that a person anticipates or looks forward to
A situation in which quantity supplied is greater than quantity demanded
A situation in which a good or service is unavailable