AP Econ. Chapter 4 Vocabulary Flashcards

473997505	Law of Demand (L.O.D.)	Quantity demanded rises as prices fall, other thongs constant. (vice versa/falls and rises)
473997506	Demand Curve	The graphic representation of the relationship between price and quantity demanded. Slopes downward b/c when price goes up, quantity demand goes down. Price and quantity inversely related.
473997507	Demand	Refers to a schedule of quantities of goods that will be bought per unit of time at various prices, other things constant.
473997508	Quantity Demanded	Refers to a specific amount that will be demanded per unit of time at a specific price, other things constant.
473997509	Movement Along a Demand Curve (M.A.D.C.)	The graphical representation of the effect of a change in price on the quantity demanded. Change in anything besides price that affects demand changes entire demand curve.
473997510	Shift in Demand	The graphical representation of the effect of anything other than price on demand. The factors are: 1) Society's income. 2) The prices of other goods. 3) Tastes. 4) Expectations. 5) Taxes on and subsidies to consumers.
473997511	Market Demand Curve (M.D.C.)	The horizontal sum of all individual demand curves.
473997512	Law of Supply (L.O.S.)	Quantity supplied rises as price rises, other things constant. (vice versa/fall)
473997513	Supply Curve	The graphical representation of the relationship between price and quantity supplied. Slopes upward. The quantity supplied varied directly-in the same direction-with the price.
473997514	Supply	Refers to a schedule of quantities a seller is willing to sell per unit of time at various prices, other things constant.
473997515	Quantity Supplied	Refers to a specific amount that will be supplied at a specific price.
473997516	Movement Along a Supply Curve (M.A.S.C.)	The graphical representation of the effect of a change in price on the quantity of supplied.
473997517	Shift in Supply	The graphical representation of the effect of a change in a factor other than price on supply. The factors are: 1) Price of Inputs 2) Technology 3) Expectations 4) Taxes and Subsidies
473997518	Market Supply Curve (M.S.C.)	The horizontal sum of all individual supply curves.
473997519	Equilibrium	A concept in which opposing dynamic forces cancel each other out. Ex: A hot-air balloon is in equilibrium when the upward force exerted by the hot-air in the balloon equals the downward pressure exerted on the balloon by gravity. Equilibrium means the upward pressure on price is exactly offset by the downward pressure on price.
473997520	Equilibrium Quantity	The amount bought and sold at the equilibrium price.
473997521	Equilibrium Price	The price toward which the invisible hand drives the market. At the market equilibrium, quantity demanded equals quantity supplied.
473997522	Excess Supply (a surplus)	Quantity supplied is greater than quantity demanded.
473997523	Excess Demand (a shortage)	Quantity demanded is greater than quantity supplied.
473997524	Fallacy of Composition	The false assumption that what is true for part will also be true for the whole.