Econ Quiz #5

Circular Flow Model

Chart that economist use to show how economic systems work, and how firms and people fit into these systems

Demand

Willingness and ability to purchase a product at a particular price

Law of Demand

States that people will buy more of a product at a lower price than they would be willling to buy at a highger price if nothing else changes

Demand Schedule

List or table that shows 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

Determinants of Demand

Things that cause demand to change (new demand curve to the right {increase} or left {decrease) when they change. They are: tastes, income, price of related products, and number of customers.

Supply

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

Law of Supply

States that producers would be willing to sell more of aproduct at higher prices, than they would be willing to sell at lower prices, if nothing else changes

Supply Schedule

List or table that shows the different amounts of a product that a producer would be willing to sell at various prices

Supply Curve

A graph that 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

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).

Complements

products that can be used “with” eachother.

Substitutes

products that can be used “in place” of eachother.