Chapter 3: Micro Flashcards
Complement
A good that usually is consumed or used together with another good
Demand
A relationship between price and quantity demanded
Demand curve
A graph of demand showing the downward-sloping relationship between price and quantity demanded
Demand schedule
A tabular presentation of demand showing the price and quantity demanded for a particular good, all else being equal
Equilibrium price
The price at which quantity supplied is greater than quantity demanded
Equilibrium quantity
The quantity traded at the equilibrium price
Inferior goods
A good for which demand decreases when income rises and increases when income falls
Law of demand
The tendency of the quantity demanded of a good in a market to decline as its price rises
Law of supply
The tendency for the quantity supplied of a good in a market to increase as its price rises
Market equilibrium
The situation in which the price is equal to the equilibrium price and the quantity traded equals the equilibrium quantity
Normal goods
A good for which demand increases when income rises and decreases when income falls
Price
The amount of money or other goods that one must pay to obtain a particular good
Quantity demanded
The quantity of a good that people want to buy at a given price during a specific time period
Quantity supplied
The quantity of a good that firms are willing to sell at a given price
Shortage, or excess demand
A situation in which quantity demanded is greater than quantity supplied
