price determination in a competitive market

Question 1

competing supply

Answer 1

when resources can be used to produce one good OR another good, not both

Question 2

competitive market

Answer 2

a market with large numbers of buyers and sellers, with low barriers to entry and exit.

Question 3

complementary goods

Answer 3

goods in joint demand; they’re often bought together, e.g., printers and ink cartridges.

Question 4

composite demand

Answer 4

demand for a multipurpose good.

Question 5

condition of demand

Answer 5

a determinant of demand other than the goods price, that sets the position of the goods demand curve.

Question 6

condition of supply

Answer 6

a determinant of supply other than the goods price, that sets the position of the goods supply curve

Question 7

consumer sovereignty

Answer 7

consumers can collectively govern production in a market via exercising spending power. strongest in perfectly competitive markets.

Question 8

cross-elasticity of demand (XED)

Answer 8

measures the responsiveness of a goods demand to a change in price of another good.

Question 9

demand

Answer 9

the quantity of a good or service that a consumer is willing and able to buy at a a given price, at a given time.

Question 10

derived demand

Answer 10

demand for a good that is the input of another good.

Question 11

disequilibrium

Answer 11

excess demand or supply in a market.

Question 12

effective demand

Answer 12

desire for a good or service that is backed by the ability to pay for said good or service.

Question 13

elasticity

Answer 13

the proportionate responsiveness of a second variable to a change in a first variable.

Question 14

equilibrium

Answer 14

no excess supply or demand in a market; a state of balance between two opposing forces.

Question 15

equilibrium price

Answer 15

the price where planned demand matches planned supply.

Question 16

excess demand

Answer 16

when consumers want to buy more than producers are willing to sell; occurs below equilibrium price.

Question 17

excess supply

Answer 17

when producers want to sell more than consumers are willing to buy; occurs above equilibrium price.

Question 18

exchange

Answer 18

trading objects of value, utilising media of exchange e.g., money.

Question 19

income elasticity of demand (YED)

Answer 19

measures the responsiveness of a goods demand to a change in the incomes of consumers

Question 20

inferior good

Answer 20

a good for which demand rises as income falls

Question 21

joint supply

Answer 21

when one good is produced, another good is also produced from the same raw materials.

Question 22

normal good

Answer 22

a good for which demand rises as incomes rise

Question 23

price elasticity of supply

Answer 23

measures the responsiveness of a goods supply to a change in price

Question 24

producer sovereignty

Answer 24

producers determine what is produced and the prices charged.

Question 25

substitute good

Answer 25

a good in competing demand; a good that can be used in place of another similar good.

Question 26

Supply

Answer 26

the quantity of a good or service that a producer is wiling and able to sell at a give price, at a given time.