Term
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Definition
| a relationship between price and quantity demanded of a certain good or service |
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| the total number of units of a good or service puchased at a certain price |
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| the common relationship that a higher price leads to a low quantity demanded of a good or service |
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| a table that shows a range of prices for a certain good or service and the quantity demanded at each price |
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| a line that shows the relationship between price an quantity demanded of a certain good or service on the horizontal axis and the price on the vertical axis |
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Definition
| a relationship etween price and the quantity supplied of a certain good or service |
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Definition
| the total number of units of a good or service sold at a certain price |
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Definition
| the common relationship that a higher price is associated with a greater quantity supplied |
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Term
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Definition
| a table that shows a range of prices for a good or service and the quantity supplied at each price |
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Term
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Definition
| a line that shows the relationship between price and quantity supplied on a graph, with quantity supplied on the horizontal axis and price on the vertical axis |
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Definition
| the price where quantity demanded is equal to the quantity supplied |
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Definition
| the quantity at which quantity demanded and quanitity supplied are equal at a certain price |
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Definition
| the comination of price and quantity where there is no economic pressure from surpluses or shortages that would cause price or quantity to shift |
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Definition
| when at the existing price, quantity supplied exceeds the quantity demanded;also called a "surplus" |
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Term
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Definition
| when at the existing price, quantity supplied exceeds the quantity demanded; also called "excess supply" |
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Term
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Definition
| at the existing price, the quantity demanded exeeds the quantity supplied, also called "shortage" |
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Term
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Definition
| at the existing price, the quantity demanded exceeds the quantity demanded exceeds the quantity supplied also called "excess demand" |
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Definition
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Term
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Definition
| when a change in some economic factor related to demand causes a different quantity to be demanded at every price |
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| reasons for a shift in demand |
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Definition
1)change in taste
2)population
3)change of income
4)price of substitutes and compliments
5)future expectations |
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Term
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Definition
| where the quantity demanded rises as income rises |
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Term
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Definition
| good where the quantity demanded alls as income rises. |
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Term
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Definition
| goods that can replace each other to some extent, so that greater consumption of one good can mean less of the other |
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Term
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Definition
| goods that are often used together, o that consumption of oe good tends to increas consumption of the ther |
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Term
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Definition
| when a change in some economic factor related to supply causes a quantity to be supplied at every price |
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Term
| reasons for shift in supply curve |
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Definition
1)natual conditions
2)input prices
3)chnges in technology
4)government taxes
5)regulations
6)subsidies |
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Term
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Definition
| government laws to regulate prices |
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Definition
| a law that prevents a price from rising above a certain level |
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Definition
| a law tht prevents a price from falling below a certain level |
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Term
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Definition
| the venefit consumers receive from buying a good or service, measure by what the individuals would have been willing to pay minus the amount that they actually paid |
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Term
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Definition
| the benefit producers reveive from selling a good or service, measure by the price producer actually received minus the price the producer would have been willing to accept |
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Term
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Definition
| the sum of consumer and producer surplus |
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Term
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Definition
| the loss in social surplus that occurs when a market produces an inefficient quantity |
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Term
| an increase in demand leads what kind of movement? |
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Definition
| movement along supply curve to a higher equilibrium price and a higher equilibrium quantity |
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Term
| a decrease in supply leads to what kind of movement |
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Definition
| movement along demand curve to a high equilibrium price and lower equilibrium quantity |
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Term
| demand goes down and supply goes down; what happens to equilibrium price and quantity? |
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Definition
| equilibrium quantity falls and price is ? |
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Term
| supply goes up and demand goes down; what happens to equilibrium price and quantity |
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Definition
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| reasons why the government would impose price ceiling: |
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Definition
| government worries that producers are makin "excess" profit and government worries necessities are unaffordable |
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| what happens when a price ceiling is set below equilibrium? |
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Definition
| quantity demanded will exceed quantity supplied and there will be a shortage |
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| consequences of price ceilings |
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Definition
1)inefficient allocations to consumers
2)wasted resources
3)low quality
4)black market |
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Term
| reasons for a price floor |
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Definition
1)influencial groups of sellers (farmers)
2)POLICY-MAKERS DISLIKE MARKET OUTCOMES (LOW-SKILLED people get paid to little) |
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Term
| what happens when price floors is set above equilibrium? |
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Definition
| quantity supplied will exceed quantity demanded and there will be a surplus |
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Term
| consequences of pric floors |
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Definition
1)inefficiency (greater unemployement)
2)wasted resources
3)illegal activity (black market)
4)inefficiently high "quality" |
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Term
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Definition
| who bears the tax. it si not recessarily the person who writes the check! |
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Term
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Definition
| the average tax rate times the quantity that is consumed at the new equilibrium |
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