Chapter 3 Flashcards
the willingness and ability of purchasers to buy goods or services
demand
the willingness of producers and merchandisers to provide goods and services
supply
the prevailing price for a specific good or service at a particular time in a given market
market price
the number of “units” of a specific good or service sold in a given market during a particular period
market quantity sold
the relationship between two variables when an increase in one is associated with an increase in the other variable
positive (or direct) relationship
the supply of one particular seller
individual supply
the supply from all sellers in a particular market
market (or aggregate) supply
a table showing the relationship between price and quantity supplied
supply schedule
a curve indicating the quantities that sellers are willing to supply at various prices
supply curve
movement along a supply curve in response to a price change
change is quantity supplied
a Latin phrase that means “other things equal” or “all else constant”
ceteris paribus
a shift of the entire supply curve, in response to something changing other than price
change in supply
any factor that affects the quantity supplied other than the price of the good or service offered for sale
nonprice determinants of supply
a table showing the relationship between price and quantity demanded
demand schedule
a curve indicating the quantities that buyers are willing to purchase at various prices
demand curve
the relationship between two variables if an increase in one is associated with a decrease in the other variable
negative (or inverse) relationship
the demand from all buyers in a particular market
market (or aggregate) demand
the demand of one particular buyer
individual demand
movement along a demand curve in response to a price change
change in the quantity demanded
a shift of the entire demand curve in response to something changing other than price
change in demand
any factor that affects the quantity demanded, other than the price of the good or service being demanded
nonprice determinants of demand
a good that can be used in place of another good
substitute good
a good that is used along with another good
complementary good
a situation in which the quantity that sellers are prepared to sell at a particular price exceeds the quantity that buyers are willing to buy at that price
surplus
a situation in which the quantity demanded at a particular price exceeds the quantity that sellers are willing to supply
shortage
a situation in which the quantity supplied equals the quantity demanded, and thus there is no pressure for change in price or quantity bought or sold
market equilibrium
the theory that market forces will tend to make shortages and surpluses disappear
theory of market adjustment
a situation of either shortage or surplus
market disequilibrium
a method of setting prices in which the seller adds a fixed percentage amount to his or her costs of production
markup (or cost-plus) pricing
describes something that is exact (though it may be unrealistic)
precise
describes something that is correct (even if only in a general way)
accurate
