Chapter 4 Flashcards

1
Q

law of demand

A

Quantity demanded rises as price falls, other things constant.

OR

Quantity demanded falls as price rises, other things constant.

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2
Q

demand curve

A

the graphic representation of the relationship between price and quantity demanded

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3
Q

demand

A

a schedule of quantities of a good that will be bought per unit of time at various prices, other things constant

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4
Q

quantity demanded

A

a specific amount that will be demanded per unit of time at a specific price, other things constant

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5
Q

movement along a demand curve

A

the graphical representation of the effect of a change in price on the quantity demanded

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6
Q

shift in demand

A

the graphical representation of the effect of anything other than price on demand

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7
Q

market demand curve

A

the horizontal sum of all individual demand curves

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8
Q

law of supply

A

Quantity supplied rises as price rises, other things constant.

OR

Quantity supplied falls as price falls, other things constant.

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9
Q

supply

A

a schedule of quantities a seller is willing to sell per unit of time at various prices, other things constant.

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10
Q

quantity supplied

A

a specific amount that will be supplied at a specific price

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11
Q

market supply curve

A

the horizontal sum of all individual supply curves

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12
Q

equilibrium

A

a concept in which opposing dynamic forces cancel each other out

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13
Q

equilibrium quantity

A

the amount bought and sold at the equilibrium price

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14
Q

equilibrium price

A

the price toward which the invisible hand drives the market

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15
Q

the fallacy of composition

A

the false assumption that what is true for a part will also be true for the whole

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