economics

Change in demand

G. a change that increases (decreases) the quantity demanded at every price

Determinants of demand

J. factors that increase or decrease demand: income, expectations, prices of related goods, population, tastes/preferences

Substitutes

O. two goods for which an increase in the price of one leads to an increase in the demand for the other

Complements

H. two goods for which the increase in the price of one leads to a decrease in the demand for the other

Quantity demanded

P. the amount of a good that buyers are willing and able to buy at a given price

Law of Demand

Q. suggests when prices increase, quantity demanded decreases; when prices decrease, quantity demanded increases

Law of Supply

F. when prices increase, quantity supplied increases; when prices decrease, quantity supplied decreases

Supply/Demand Curve

N. a graph that shows the positive relationship between price and quantity supplied or demanded

Quantity supplied

T. the amount of a good or service producers are willing and able to supply at different prices during a given period of time

Change in supply

D. any change that increases (decreases) the quantity supplied at every price

Determinants of supply

M. factors that impact supply: entry/exit of sellers, expectations, taxes/subsidies, technology/input prices

Supply/Demand schedule

E. a table that shows the quantity supplied/demanded at different prices and is used to create a supply/demand curve

Tax

R. revenue collected by the government

Subsidy

C. a benefit given to an individual, business, or institution, usually by the government

Ceteris paribus

L. the assumption behind a demand curve or a supply curve is that no relevant economic factors, other than the product’s price, are changing - “other things being equal.”

Equilibrium price

A. the price at which the quantity demanded by buyers equals the quantity supplied by sellers; also called the market-clearing price

Equilibrium quantity

K. the assumption behind a demand curve or a supply curve is that no relevant economic factors, other than the product’s price, are changing - “other things being equal.”

Surplus

S. the situation that results when the quantity supplied of a product exceeds the quantity demanded; generally happens because the price of the product is above the market equilibrium price

Shortage

B. the situation that results when the quantity demanded for a product exceeds the quantity supplied; generally happens because the price of the product is below the market equilibrium price

Economics

I. the social science that studies the production, distribution, and consumption of goods and services