Chapter 4 Vocab Flashcards
Demand
schedule of quantities of a good that will be bought per unit of time at various prices, other things constant.
Demand Curve
graphical representation between price and quantity demanded.
equilibrium
a concept in which opposing dynamic forces cancel each other out.
equilibrium price
price toward which the invisible hand drives the market.
equilibrium quantity
the amount bought and sold at the equilibrium price.
excess demand
shortage, quantity demanded is greater than quantity supplied.
excess supply
surplus, quantity supplied is greater than quantity demanded.
fallacy of composition
the false assumption that what is true for a part will also be true for a whole.
law of demand
quantity demanded rises and price falls, other things constant.
law of supply
quantity supplied rises and price rises, other things constant
market demand curve
horizontal sum of all individual demand curves.
market supply curve
horizontal sum of all individual supply curves.
movement along a demand curve
graphical representation of the effect of a change in price on the quantity demanded
movement along a supply curve
the graphical representation of the effect of a change in price on the quantity supplied.
quantity demanded
specific amount that will be demanded per unit of time at a specific price, other things constant.
quantity supplied
specific amount that will be supplied at a specific price.
shift in demand
the graphical representation of the effect of anything other than price on demand.
supply
a schedule of quantities a seller is willing to sell per unit of time at various prices, other things constant.
shift in supply
the graphical representation of the effect of a change in a factor other than price on supply.
supply curve
graphical representation of the relationship between price and quantity supplied.
