3.1 Demand, Supply, and Equilibrium in Markets for Goods and Services Flashcards
Economists use the term _______ to refer to the amount of some good or service consumers are willing and able to purchase at each price.
Demand
What are two things are demands based off of?
- Needs and Wants
2. Ability to pay
_______ is what a buyer pays for a unit of a specific good or service
Price
______ is the total number of units that consumers would purchase at a given price.
Quantity Demanded
A _____ in price of a good or service almost always decreases the quantity demanded; A _____ in price will increase the quantity demanded.
Rise; Fall
An inverse relationship between price and quantity demanded;
Assumes that all other variables that affect demand are held constant.
Law of Demand
______ is a table that shows the quantity demanded at a given price.
Measures quantity demanded at a given price over a period of time.
Demand Schedule
__________ shows the relationship between price and quantity demanded;
quantity is on the horizontal axis and price on the vertical axis
Demand Curve
_______ and ______ are two ways to describe the same relationship between price and quantity demanded.
Demand Schedule; Demand Curve
Demand Curves slope from _____ to _____.
Left to Right
What do demand curves embody?
Law of Demand
_______ refers to the curve and quantity supplied to the point on the curve.
Supply
The ______ and the ______ are two different ways of illustrating supply.
Supply Schedule; Supply Curve
On a supply curve _____ is show on the vertical axis and ______ is shown on the horizontal axis.
Price;Quantity
________ is created by graphing the points from the supply schedule and connecting them.
Supply Curve
The _______ slope of the supply curve illustrates the Law of Supply.
A higher price = Higher Quantity Supplies and vice versa
Upward Slope
In the Law of Supply, as price rises the quantity supplied ______; Conversely as prices decreases quantity supplied ______
Increases; Decreases
The point at which the supply curve and the demand curve intersect is called ______.
The equilibrium
Quantity Demanded is = Quantity Supplied;
Amount of the product consumers want to buy is = amount producers want to sell
Equilibrium Quantity
The _____ is the only price where consumers and producers agree.
Equilibrium Price
_______ is a situation in which the quantity of a good or service supplied is more than the quantity demanded, and the price is above the equilibrium level determined by supply and demand.
Excess Supply; Surplus
Quantity demanded is stimulated by a lower price and is now exceeding quantity supplied
Excess Demand; Shortage
