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29 terms

Microeconomics - Chapter 3 Supply and Demand

The Microeconomy Today 11th edition
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market activity
The basic goals of utility maximization, profit maximization, and welfare maximization explain most _____________.
Inable
We are absolutely ________________ to produce all the things we need or desire.
Time, energy, resources
The limited amount of _____________, _______________, _____________ we have for producing those things we could make for ourselves.
Circular flow chart
summarizes the kinds of interactions that occur among market participants.
factor market
any place where factors of production are bought and sold
product market
any place where finished goods and services are bought and sold
opportunity cost
the most desired goods or services that are forgone in order to obtain something else
the consumer
the final recipient of all goods and services produced
exchange
a market exists wherever and whenever an ________________ takes place.
dollars, resources
Every market transaction involves an exchange of ___________ for goods (in product markets) or _____________ (in factor markets).
supply
the ability and willingness to see (produce) specific quantities of a good at alternative prices in a given time period.
demand
the ability and willingness to buy specific quantities of a good at alternative prices in a given time period.
demand schedule
a table showing the quantities of a good a consumer is willing and able to buy at alternative prices in a given time period
demand curve
a curve describing the quantities of a good a consumer is willing and able to buy at alternative prices in a given time period; it shows us how changes in market prices alter consumer behavior
price
the amount we buy of a good depends on its...
price falls
As a good's ______________, people purchase more of it.
law of demand
the quantity of a good demanded in a given time period increases as its price falls
Determinants of market demand
Tastes, income, other goods, expectations, number of buyers
substitute goods
goods that substitute for each other; when the price of good x rises, the demand for good y increases
complementary goods
goods frequently consumed in combination; when the price of good x rises, the demand for good y falls
Rightward shift in demand curve
occurs when income increases and an increase in taste (desire)
movements along the demand curve
a response to prices changes for that good
shifts in the demand curve
occur when the determinants of demand change
changes in quantity demanded
movements along a demand curve are caused by
changes in demand
shifts in a demand curve are caused by
market demand
the total quantities of a good or service people are willing and able to buy at alternative prices in a given time period; the sum of individual demands
the number of potential buyers and their respective tastes, incomes, other goods, and expectations
the market demand is determined by
determinants of market supply
technology, factor costs, other goods, taxes and subsidies, expectations, number of sellers
market supply
the total quantities of a good that sellers are willing and able to sell at alternative prices in a given time period