The Market Flashcards
Substitute/Perfect Substitute
Good that can fill in for another/ a good that can be exactly what the other one was.
Complementary Goods
Goods that go together; when demand for one increases, so does demand for the other.
Shift of a Supply/Demand Curve
When the whole curve shifts; a change brought about by changes in the original conditions.
Movement along a Supply/Demand Curve
Change in consumption because of change in price or vice versa.
Market Supply/Demand
The sum total of the supply/demands of all the consumers/firms.
Quantity Supplied
The amount of a good that a firm can/would produce at a given price point in a certain amount of time.
Supply Schedule
Diagram of how much firms would produce of certain products at certain prices.
Law of Supply
The positive relationship between price and quantity of good produced.
Equilibrium
The condition when supply and demand are equal.
Excess Demand/ Shortage
more want than can be supplied. Price goes up.
Excess Supply/ Surplus
More supply than demand. Price goes down.
Product/Output markets
The market where consumer goods/services are bought.
Input/Factor markets
The market where the resources are bought.
Quantity Demanded
The amount of a product that a household would consume if it could buy all it wanted at the current market price.
Normal Goods
Income goes up -> demand goes up. (1983 chardonnay)
