Economics Chapter 3 Flashcards
A schedule showing how much of a good or service people will purchase at any price during a specified period of time, other things being held constant.
Demand
All of the arrangements that individuals have for exchanging with one another. Ex:labor market, automobile market, and credit market
Market
The observation that their is a negative or inverse relationship between the price of any good or service and the quantity demanded holding other factors constant. So a change in price causes a change in demand in which direction?
Law of demand— it has an inverse relationship price goes up and demand goes down and vice versao
The money price of one commodity divided by the price of another commodity; the number of units of one commodity that a must be sacrificed to purchase another unit if another commodity
Relative price
The price expressed in today’s dollars; also called nominal or expressed price
Money price
A graphical representation of the demand schedule; a negatively sloped line showing the inverse relationship between price and quantity demanded (other things being equal)
Demand curve
The demand of all consumers in the marketplace for a particular good or service. The summation at each price of the quantity demanded by each individual
Market demand
The law of demand posts an —— relationship between the quantity demanded of a good and it’s price, other things constant.
Inverse
The law of —— applies when other things, such as income and the prices of all other goods and services, are held constant.
Demand
The ——–curve is derived by summing the quantity demanded by individuals at each price. Graphically, we add the individual demand curves horizontally to derive the total, or market, demand curve.
Market demand
We measure the ——– ——– in terms of time dimension and in ——- -quality terms.
Demand schedule……… Constant
Shift to the left on a demand curve means?
Decrease in demand for a good or service
Shift in demand curve to the right means ?
An increase in demand for a good or service
Goods for which demand rises as income rises.
Normal good— most goods are normal goods
Goods for which demand falls as income rises.
Inferior goods
What happens to demand when a substitutes price increases?
It causes a change in demand in the same direction. Example: an increase in the price if butter will cause an increase in demand for margarine
What happens to demand when a complement good price changes?
A change in the price of a product will cause a change in demand in the opposite direction for the other good. Example: computer decrease in price will see an increase in demand for printer. If decrease in price of computer will see an increase in demand for printer at any price
What cause a shift or movement in the entire demand curve?
A change in determinant other than the good’s own price. A change in any if the ceteris pair us conditions causes the curve to shift.
What causes a movement along the demand curve?
A change in price if the good is a movement along the curve. This changes the quantity demanded. Hence represents one spot on the actual curve
There is normally an —- relationship between Price and quantity of a good supplied, other things held constant.
Direct
The —– curve normally shows a direct relationship between price and quantity supplied.
Supply
——–curve is obtained by horizontally adding individual supply curves in the market.
Market supply
Movement along the supply curve occurs when…
There is a change in price. A change in price causes a change in quantity supplied this causes movement along the same supply curve from one point to another.
If the price changes we ——— a curve- there is a change in quantity demanded if supplied.
Move along
