Studied by 10 people
Horizontal sum
________- individual demand curves of all consumers in a market.
Government
________ can limit quantity by requiring licenses to produce certain products.
Competitive market
many buyers and sellers for the same good or service
Market equilibrium
includes equilibrium price and quantity
Demand Schedule
table that shows how much of a certain good consumers are willing to buy at different prices
Demand Curve
graphical representation of a demand schedule
Law of Demand
the higher price of a good or service leads to less quantity of that good or service, all other things being equal
Complements in consumption
two goods that are used together
The rise in the price of one good leads to a decrease in demand for the other good (example
Beef and Potatoes)
Individual Demand Curve
shows quantity demanded and price for a single customer
Market Demand Curve
combined quantity demanded of all consumers determined by the market price of a good
Horizontal sum
individual demand curves of all consumers in a market
Supply Schedule
table that shows how much of a good or service produced will affect prices
Examples of input prices for producing donuts
Ingredients, Oven, Labor, Utility, and Rent
Substitutes in production (Example
Coke and BodyArmor)
Complements in production (Example
Cow skin and beef)
Wasted Resources
a form of inefficiency where people expend money, effort, and time to cope with the shortcomings experienced by a price ceiling
Inefficiently low quality
sellers sell lower quality goods at a lower price
competitive market
a market in which there are many buyers and many sellers for the same good or service
demand curve
a graph of the relationship between the price of a good and the quantity demanded
demand schedule
a table that shows the relationship between the price of a good and the quantity demanded
quantity demanded
actual amount consumers are willing and able to buy at a certain price
demand
how much people want at every price point
law of demand
higher price of a good or service leads to less quantity of that good or service, all other things being equal
increase in demand
a rightward shift of the demand curve
decrease in demand
a leftward shift of the demand curve
TRIBE
acronym for properties that shift the demand curve
taste
how people feel about a product
related goods or services
includes substitutes and compliments in consumption
substitues in consumption
goods that can be used in place of another good to satisfy similar needs or desires; increase in price of this leads to an increase in demand for "THE" product
compliments in consumption
goods that tend to be consumed together; a rise in price of this product leads to a decrease in demand for "THE" product
income
includes normal and inferior goods
normal goods
goods that consumers demand more of when their incomes rise
inferior goods
a rise in income decreases the demand, mostly due to better, more expensive options
individual demand curve
illustrates the relationship between quantity demanded and price for an individual consumer
market demand curve
the demand curve that shows the quantities demanded by everyone who is interested in purchasing the product
horizontal sum
the individual demand curves of all consumers in that market
quantity supplied
amount producers are willing to produce and sell
supply
the amount of goods available
supply schedule
a table that shows the relationship between the price of a good and the quantity supplied
law of supply
the price and quantity supplied are directly related
increase in supply
a downward shift in supply curve
decrease in supply
an upward shift of the supply curve
IRENT
factors that shift the supply curve
input
any good or service that is used to produce another good or service
related goods or services
includes substitutes and compliments in production
substitutes in production
alternative products that producers COULD use their resources to make
compliments in production
goods that must be produced together
equilibrium
an economic condition where no individual would be better off with any alternative
equilibrium price
the price that balances quantity supplied and quantity demanded
equilibrium quantity
the quantity supplied and the quantity demanded at the equilibrium price
surplus
excess supply
shortage
excess demand
increase in demand
equilibrium price and quantity both rise
increase in supply
the equilibrium price decreases and the equilibrium quantity increases
decreases, increases
when supply _____ and demand _____, price rises and quantity is ambiguous
increases, decreases
when supply _____ and demand _____, price falls and quantity is ambiguous
increases, increases
when supply _____ and demand _____, quantity rises and price is ambiguous
decreases, decreases
when supply _____ and demand _____, quantity falls and price is ambiguous
consumer surplus
the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it
producer surplus
the amount a seller is paid for a good minus the seller's cost of providing it
Note 
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