Supply, Demand, and Market Equilibrium Vocabulary

Vocabulary flashcards reviewing core supply and demand principles, market clearing terms, and related lecture concepts.

Demand

The entire curve representing how much consumers are willing to buy across various price levels.

Quantity Demanded

Specific points along the demand curve indicating the exact amount consumers are willing to buy at a given price.

Law of Demand

The economic rule stating that as price increases, quantity demanded decreases, and as price decreases, quantity demanded increases.

Normal Good

A good for which an increase in consumer income leads to an increase in demand.

Inferior Good

A good for which an increase in consumer income leads to a decrease in demand, such as ramen noodles or store-brand foods.

Substitutes

Goods that serve similar purposes and can replace one another in consumption, where an increase in the price of one leads to an increase in demand for the other.

Complements

Goods that are consumed together, where an increase in the price of one leads to a decrease in demand for the other.

Law of Supply

The economic rule stating that as price increases, quantity supplied increases, and as price decreases, quantity supplied decreases.

Quantity Supplied

Specific points along the supply curve indicating the exact amount producers are willing to sell at a given price.

Market Equilibrium

The price and quantity point where the supply and demand curves intersect, at which quantity supplied equals quantity demanded ($Q_S = Q_D$).

Surplus

A market state where the quantity supplied is greater than the quantity demanded at a specific price.

Shortage

A market state where the quantity demanded is greater than the quantity supplied at a specific price.

Mental Health Parity Law

A legal requirement that health insurance plans cover mental health care services in the same manner as physical health services.