Study Guide for Introduction to Microeconomics.

Atomistic Buyer

An atomistic buyer makes purchasing decisions independently and does not significantly affect the overall market.

Quantity Demanded

The total amount of a good or service consumers are willing to purchase at a specific price.

Law of Demand

States that as the price of a good decreases, the quantity demanded increases, and vice versa.

Market Reserve Price

The highest price that consumers are willing to pay for a good, reflecting their maximum valuation.

Normal Goods

Products for which demand increases as consumer income rises.

Substitute Goods

Products that can replace each other; an increase in the price of one leads to an increase in the demand for the other.

Aggregate Expenditure

The total spending on goods and services in an economy at a given level of income and price.

Law of Supply

States that, all else being equal, an increase in the price of a good will lead to an increase in the quantity supplied.

Market Equilibrium

The point where the quantity of goods supplied equals the quantity demanded.

Producer Surplus

The difference between the price received by a producer and the minimum price they are willing to accept.