3.2 Shifts in Demand and Supply for Goods and Services

ceteris paribus

other things being equal

complements

goods that are often used together so that consumption of one good tends to enhance consumption of the other

factors of production

the resources such as labor, materials, and machinery that are used to produce goods and services; also called inputs

inferior good

a good in which the quantity demanded falls as income rises, and in which quantity demanded rises and income falls

inputs

the resources such as labor, materials, and machinery that are used to produce goods and services; also called factors of production

normal good

a good in which the quantity demanded rises as income rises, and in which quantity demanded falls as income falls

shift in demand

when a change in some economic factor (other than price) causes a different quantity to be demanded at every price

shift in supply

when a change in some economic factor (other than price) causes a different quantity to be supplied at every price

substitute

a good that can replace another to some extent, so that greater consumption of one good can mean less of the other