Chapter 3: The Demand Side Of The Market Flashcards Preview

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Flashcards in Chapter 3: The Demand Side Of The Market Deck (23)
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1
Q

Demand schedules

A

Tables that show the relationship between the price of a product and the quantity of the product demanded

2
Q

Quantity demanded

A

The amount of a good or service that a consumer is willing and able to purchase at a given price

3
Q

Demand curve

A

A curve that shows the relationship between the price of a product and quantity of the product demanded

4
Q

Market demand

A

The demand by all the consumers of a given good or service

5
Q

The law of demand

A

The inverse relationship between the price of a product and the quantity of the product demanded

6
Q

Purchasing power

A

The quantity of goods and services that consumer can buy with a fixed income

7
Q

Certainly parings condition

A

All else equal

8
Q

Variables that shift market demand

A
Income 
Prices of related goods
Tastes
Population and demographics 
Expectations
9
Q

Normal good

A

When demand increases following a rise in income and decreases following a fall in income

Hot dogs < streaks

10
Q

Inferior good

A

When demand decreases following a rise in income and increases following a fall in income

11
Q

Substitutes

A

Goods and services that can be used for the same purpose

Example: energy drinks and coffee

12
Q

Two goods are substitutes of each other if:

A

When you buy more of one, you buy less of the other.

A decrease in the price of a substitute cause the demand curve curve for a good to shift to the left

13
Q

Complements

A

Goods and services that are used together

Example: hamburgers and buns

14
Q

Demographics

A

Refers to the different type of people that make up a population

15
Q

Quantity supplied

A

The amount of a good or service that a firm is willing and able to supply at a given price

16
Q

Supply schedule

A

Table that shows the relationship between the price of a product and the quantity of the product supplied

17
Q

Supply curve

A

Shows the relationship between the price of a product and the quantity of the product supplied

18
Q

Law of supply

A

Holding everything else constant, increases in price cause increases in the quantity supplied, and decreases in price result in decreases in the quantity supplied

19
Q

Most important variables of that shift the supply curve

A
Price of inputs 
Technological change
Prices of substitutes in production
Number of firms in the market 
Expected future prices
20
Q

The factor most likely to cause the supply curve to shift

A

Price of an input

21
Q

Technological change

A

+ or - change in the ability of a firm to produce a given level of output from a given quantity of inputs

22
Q

Market equilibrium

A

Only at market equilibrium will the quantity demanded equal the quantity supplied

23
Q

Surplus

A

When the quantity supplied is greater than the quantity demanded