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AP Macroeconomics > Unit 1 Vocabulary Part 2 > Flashcards

Unit 1 Vocabulary Part 2 Flashcards

1
Q

a market in which there are many buyers and sellers of the same good or service, none of whom can influence the price at which the good or service is sold

A

competitive market

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2
Q

a model of how a competitive market works

A

supply and demand model

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3
Q

shows how much of a good or service consumers will be willing and able to buy at different prices

A

demand schedule

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4
Q

the actual amount of a good or service consumers are willing and able to buy at some specific price; shown as a single point in a demand schedule or along a demand curve`

A

quantity demanded

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5
Q

a graphical representation of the demand schedule; shows the relationship between quantity demanded and price

A

demand curve

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6
Q

says that a higher price for a good or service, all other things being equal, leads people to demand a smaller quantity of that good or service

A

law of demand

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7
Q

a shift of the demand curve, which changes the quantity demanded at any given price

A

change in demand

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8
Q

a change in the quantity demanded of a good that is the result of a change in the good’s price

A

movement along the demand curve

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9
Q

two goods are ____ if a rise in the price of one of the goods leads to an increase in the demand for the other good

A

substitutes

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10
Q

two goods are ____ if a rise in the price of one of the goods leads to a decrease in the demand for the other good

A

complements

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11
Q

when a rise in income increases the demand for a good–the normal case–it is a ___.

A

normal good

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12
Q

when a rise in income decreases the demand for a good, it is an ____.

A

inferior good

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13
Q

illustrates the relationship between quantity demanded and price for an individual consumer

A

individual demand curve

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14
Q

the actual amount of a good or service people are willing to sell at some specific price

A

quantity supplied

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15
Q

shows how much of a good or service producers would supply at different prices

A

supply schedule

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16
Q

shows the relationship between the quantity supplied and the price

A

supply curve

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17
Q

says that other things being equal, the price and quantity supplied of a good are positively related

A

law of supply

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18
Q

a shift of the supply curve, which changes the quantity supplied at any given price

A

change in supply

19
Q

a change in the quantity supplied of a good arising from a change in the good’s price

A

movement along the supply curve

20
Q

a good or service that is used to produce another good or service

A

input

21
Q

illustrated the relationship between quantity supplied and price for an individual producer

A

individual supply curve`

22
Q

no individual would be better off doing something different

A

equilibrium

23
Q

the price has moved to a level at which the quantity demanded of a good equals the quantity supplied of that good

A

equilibrium price

24
Q

quantity of the good bought and sold at equilibrium price

A

equilibrium quantity

25
Q

there is a ___ of a good or service when the quantity supplied exceeds the quantity demanded; price is above equilibrium

A

surplus

26
Q

there is a ____ of a good or service when the quantity demanded exceeds the quantity supplied; price is below equilibrium

A

shortage

27
Q

legal restrictions on how high or low a market price may go

A

price controls

28
Q

a maximum price sellers are allowed to charge for a good/service

A

price ceiling

29
Q

a minimum price buyers are required to pay for a good/service

A

price floor

30
Q

people who want the good badly and are willing to pay a high price don’t get it, and those who care relatively little about the good and are only willing to pay a relatively low price do get it

A

inefficient allocation to consumers

31
Q

people expend money, effort, and time to cope with the shortages caused by price ceiling

A

wasted resources

32
Q

the goods being offered are of ____: sellers offer low quality goods at a low price even though buyers would prefer a higher quality at a higher price

A

inefficiency low quality

33
Q

a market in which goods or services are bought and sold illegally-either because it is illegal to sell them at all or because the prices charged are legally prohibited by a price ceiling

A

black market

34
Q

a legal flloor on the hourly wage rate paid for a worker’s labor

A

minimum wage

35
Q

price floors lead to ____: those who would be willing to sell the good at the lowest price are not always those who manage to sell it

A

inefficient allocation of sales among sellers

36
Q

price floors often lead to inefficiency in that goods of ____ are offered: sellers offer high-quality goods at a high price, even though buyers would prefer a lower quality at a lower price

A

inefficiency high quality

37
Q

an upper limit on the quantity of some good that can be bought or sold

A

quantity control (quota)

38
Q

the price at which consumers will demand that quantity

A

demand price

39
Q

the price at which producers will supply that quantity

A

supply price

40
Q

a quantity control, or quota, drive a ____ between the demand price and the supply price of a good; that is, the price paid by buyers ends up being higher than the received by sellers

A

wedge

41
Q

the difference between the demand and supply price at the quota amount is the ____, the earnings that accrue to the license-holder from ownership of the right to sell the good. It is equal to the market price of the license when the licenses are traded

A

quota rent

42
Q

gives its owner the right to supply a good or service

A

license

43
Q

the value of forgone mutually beneficial transactions

A

deadweight loss

AP Macroeconomics (7 decks)

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