econ chapter 4, 5, 6 Flashcards
any place where people come together to buy and sell goods or services
market
the willingness and ability of buyers to purchase different quantities of a good at different prices during a specific time period
demand
a law stating that as the price of a good increases, the quantity demanded of the good decreases, and that as the price of a good decreases, the quantity demanded of the good increases
law of demand
the number of units of a good purchased at a specific price
quantity demanded
a law stating that as a person consumes additional units of a good, eventually the utility gained from each additional unit of the good decreases
law of diminishing marginal utility
the numerical representation of the law of demand
demand schedule
the graphical representation of the law of demand
demand curve
a good for which the demand rises as income rises and falls as income falls
normal good
a good for which the demand falls as income rises and rises as income falls
inferior good
a good for which the demand remains unchanged as income rises or falls
neutral good
a similar good. The price of one and the demand for the other move in the same direction
substitute
a good that is consumed jointly with another good. the price of one and the demand for the other move in opposite directions
complement
the willingness and ability of sellers to produce and offer to sell different quantities of a good at different prices during a specific time period
supply
a law stating that as the price of a good increases, the quantity supplied of the good increases, and as the price of a good decreases, the quantity supplied of the good decreases
law of supply
a relationship between two factors in which the factors move in the same direction. For example, as one factor rises, the other rises, too
direct relationship
the number of units of a good produced and offered for sale at a specific price
quantity supplied
a numerical chart illustrating the law of supply
supply schedule
a graph that shows the amount of a good sellers are willing and bale to sell at various prices
supply curve
the body of skills and knowledge concerning the use of resources in production
technology
the ability to produce more output with a fixed amount of resources
advancement in technology
the average cost of a good. If 400,000 is spent to produce 100 cars, the average is 4,000
per-unit cost
a financial payment made by government for certain action
subsidy
a legal limit of the number of units a foreign produced good that can enter a country
quota
