Economics Vocab 10/11 Flashcards
Competitive Market
A market with many buyers and sellers of the same good or service. No one can influence the price at which a good or service is sold.
Supply and Demand Model
A model of how the competitive market works.
Demand Schedule
How much of a good or service consumers will be willing and able to buy at different prices.
Quantity Demanded
The actual AMOUNT of a good or service consumers are willing and able to buy at a specific price.
Demand Curve
A graphical representation of the demand schedule. Shows the relationship between quantity demanded and price.
Law of Demand
Says that a higher price for a good or service with all other things being equal leads people to demand a smaller quantity of the good or service.
Substitutes
Two goods can be considered substitutes if a rise in the price of one good leads to an increase in the demand for the other good.
Complements
Two goods can be considered complements if a rise in the price of on good leads to a decrease in the demand for another.
Normal Goods
When the rise in income increases the demand for a good in a NORMAL case, it is a normal good.
Inferior Goods
When the rise of income decreases the demand for a good, it is inferior.
Quantity Supplied
The actual amount of a good or service producers are willing to sell at a specific price.
Supply Schedule
How much of a good or service producers will supply at a different prices.
Supply Curve
Shows the relationship between quantity supplied and price.
Law of Supply
Says that other things being equal, the price and quantity supplied of a good are positively related.
Change in Supply
A shift of the supply curve, which changes the quantity supplied at any given price.
