Microeconomics Market Equilibrium and The Price System Flashcards

1
Q

Market equilibrium

A

a situation that occurs in a market when the price is such that the quantity that consumers wish to buy is exactly balanced by the quantity that firms wish to supply

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2
Q

Derived demand

A

demand for a factor of production or good which derives not from the factor or the good itself, but from goods or services that it produces

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3
Q

Unemployment

A

results when people seeking work at the going wage cannot find a job

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4
Q

Comparative static analysis

A

examines the effect on equilibrium of a change in the external conditions affecting a market

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5
Q

Elasticity

A

a measure of the sensitivity of one variable to changes in another variable

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6
Q

Price elasticity of demand (PED)

A

a measure of the sensitivity of quantity demanded to a change in the price of a good or service. It is measured as %changequantitydemanded/%changeprice

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