Econ Quiz 5

Here comes the money, here comes the money. Money money money money money money money money money dollar dollar

Circular flow model

chart that economists use to show how economic systems work, and how firms and people fit into these systems.

Product Market

market where all transactions involving goods and services takes place.

Factor market

market where all transactions involving factors of production takes place (mostly labor and capital).

Demand

willingness and ability to purchase a product at a particular price.

Law of Demand

states, people will buy more of a product at a lower price than they would be willing to buy at a higher price, if nothing else changes.

Demand Schedule

list/table showing the different amounts of a product that could be SOLD at various prices.

Demand Curve

graph showing the different amounts of a product that could be SOLD at various prices.

substitutes

products that can be used "in place" of each other.

Determinants of Demand

things that cause demand to change [new demand curve to the right (increase) or left (decrease)], when they change.

complements

products that can be used "with" eachother.

Supply

the amount of a product that a producer is willing to sell at a particular price.

Law of Supply

states, producers would be willing to sell more of a product at higher prices, than they would be willing to sell at lower prices, if nothing else changes.

Supply schedule

a list/table that shows the different amounts of a product that a producer would be willing to sell at various prices.

Supply curve

a graph the shows the different amounts of a product that a producer would be willing to sell at various prices.

Diminishing Returns

The point in production where cost per unit produced increases.

pt. of equilibrium

 A product’s supply and demand curves will intersect at a

Surplus

the amount of a product that a producer offers for sale in excess of the amount the consumer wants

Shortage

the amount of a product that a consumer wants, in excess of the amount a producer offers for sale

elasticity

responsiveness of quantity (demanded) to price changes

inelastic demand

when the percentage change in price ($) is greater than the percentage change in quantity demanded (QD)

elastic demand

when the percentage change in price ($) is less than the percentage change in quantity demanded (QD)