Term
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Definition
| the amount of some good or service that consumers are willing to buy at each price |
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Term
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Definition
| what a buyer pays for a unit of the specific good or service |
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Term
| Define quantity demanded. |
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Definition
| the total number of units of a good or service consumers are willing to purchase at a given price |
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Term
| Define the law of demand. |
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Definition
| The common relationship that a higher price leads to a lower quantity demanded of a certain good or service and a lower price leads to a higher quantity demanded, while all other variables are held constant. |
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Term
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Definition
| 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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Term
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Definition
| a graphic representation of the relationship between price and quantity demanded of a certain good or service, with quantity on the horizontal axis and the price on the vertical axis |
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Term
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Definition
| the amount of some good or service a producer is willing to supply at each price |
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Term
| Define quantity supplied. |
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Definition
| the total number of units of a good or service producers are willing to sell at a given price |
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Term
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Definition
| the common relationship that a higher price leads to a greater quantity supplied and a lower price leads to a lower quantity supplied, while all other variables are held constant |
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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 graphic representation of the relationship between price and quantity supplied of a certain good or service, with quantity supplied on the horizontal axis and price on the vertical axis |
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Term
| Define equilibrium as it applies to supply and demand in economics. |
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Definition
| the situation where quantity demanded is equal to the quantity supplied; the combination of price and quantity where there is no economic pressure from surpluses or shortages that would cause price or quantity to change |
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Term
| Define equilibrium price. |
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Definition
| the price where quantity demanded is equal to quantity supplied |
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Term
| Define equilibrium quantity. |
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Definition
| the quantity at which quantity demanded and quantity supplied are equal for a certain price level |
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Term
| Define excess supply or surplus. |
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Definition
| at the existing price, quantity supplied exceeds the quantity demanded; also called a surplus |
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Term
| Define excess demand or shortage. |
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Definition
| at the existing price, the quantity demanded exceeds the quantity supplied; also called a shortage |
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Term
| Define "ceteris paribus" as used by Economists. |
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Definition
| It means assuming that all "other things being equal" or that all other variables besides price and quantity are constant. |
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Term
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Definition
| a good in which the quantity demanded rises as income rises, and in which quantity demanded falls as income falls |
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Term
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Definition
| a good in which the quantity demanded falls as income rises, and in which quantity demanded rises as income falls |
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Term
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Definition
| a good that can replace another to some extent, so that greater consumption of one good can mean less consumption of the other |
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Term
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Definition
| goods that are often used together so that consumption of one good tends to enhance consumption of the other |
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Term
| Define "shift in demand". |
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Definition
| when a change in some economic factor (other than price) causes a different quantity to be demanded at every price |
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Term
| Define "shift in supply". |
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Definition
| when a change in some economic factor (other than price) causes a different quantity to be supplied at every price |
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Term
| Define inputs or factors of production. |
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Definition
| the resources such as labor, materials, and machinery that are used to produce goods and services |
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Term
| Equilibrium: What is the first step to find new equilibrium from an event? |
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Definition
| Draw Supply and Demand model using standard pieces of information and find equilibrium values. |
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Term
| Equilibrium: What is the second step to find new equilibrium from an event? |
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Definition
| Decide if economic event affects supply or demand and if any factor is mentioned. |
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Term
| Equilibrium: What is the third step to find new equilibrium from an event? |
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Definition
| Decide if event shifts the supply curve or the demand curve left or right. |
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Term
| Equilibrium: What is the fourth step to find new equilibrium from an event? |
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Definition
| Identify new equilibrium values and compare them to the original equilibrium values. |
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Term
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Definition
| government laws to regulate prices instead of letting market forces determine prices |
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Term
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Definition
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Term
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Definition
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Term
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Definition
| the extra benefit consumers receive from buying a good or service, measured 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 extra benefit producers receive from selling a good or service, measured by the price the producer actually received minus the price the producer would have been willing to accept |
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Term
| Define social surplus aka economic surplus aka total surplus. |
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Definition
| the sum of consumer surplus 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
| Define "Local Knowledge Problem" from Markets and Pickles podcast. |
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Definition
| The issue that people at the top of an organization don't know what's happening at the bottom; they don't have all the information needed to make the best decision. |
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Term
| Define "Gains from Trade" from Market and Pickles podcast. |
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Definition
| If you allow people to trade voluntarily, everyone gets happier. |
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